With global markets continuing to swing to the tunes of US’ tariff flip-flops, benchmark indices in India gained over 2% on Tuesday. Notably, it became first major market to recoup the losses made since the reciprocal tariffs were first announced on April 2.
The holiday-shortened week started on a strong note, led by positive global flows. The Sensex rose by 1,577.63 points or 2.1% to close at 76,734.89, while the Nifty gained 500 points or 2.19% to settle at 23,328.55. Investors’ wealth surged by Rs 10.6 lakh crore during the session.
Among Asian markets, indices in the Philippines, Indonesia, and South Korea are still up to 1.1% lower from their April 2 levels. Singapore, Hong Kong and Taiwan indices are lower by 8.3%, 7.5%, and 6.8% respectively, while Japan, Thailand, Malaysia, and China are down up to 4.1%.
“The market rally was largely fuelled by easing global trade tensions, notably a tariff reprieve announced by US President Donald Trump, which lifted investor sentiment worldwide,” said Vaibhav Vidwani, Research Analyst at Bonanza Group.
On Monday, Trump indicated that he is exploring potential exemptions on tariffs imposed on imported vehicles and auto parts. Earlier last week, he also announced tariff relief on electronic goods such as smartphones, laptops and semiconductors.
Echoing similar views, Prashanth Tapse, Senior VP (Research), Mehta Equities, said, “Buoyancy across global equity markets provided major support to domestic benchmarks as recent developments suggest that some resolution to the ongoing tariff war could emerge in the coming weeks.”
However, he cautioned that falling crude oil prices and strong FII outflows continue to raise concerns, stoking fears that weakening demand may lead to a recession in key global economies.
Overall, market breadth was strongly positive, with 3,266 gainers versus 833 losers on the BSE. Broader indices also performed well, posting gains of up to 3%, while all sectoral indices ended in the green.
According to provisional BSE data, foreign portfolio investors (FPIs) were net buyers to the tune of Rs 6,065.78 crore, while domestic institutional investors (DIIs) were net sellers worth Rs 1,951.60 crore on Tuesday.
Realty, industrials, capital goods, auto, and consumer discretionary sectors led the gains, rising up to 5.81%.
Barring HUL (down 0.23%) and ITC (down 0.36%), all other Sensex stocks ended in positive territory. IndusInd Bank, Tata Motors, L&T, Axis Bank, and Adani Ports were the top gainers on the Sensex, advancing up to 6.84%. In the Nifty 50, ITC was the only loser, with a marginal decline of 0.28%.
On Tuesday, market volatility eased significantly, as the India VIX index fell 19.8% to 16.13 — the sharpest single-day decline in 10 months.