On Tuesday, the Indian stock market experienced a significant upswing for the second consecutive day, fueled by positive global trends and a reduction in trade tensions. The Nifty 50 index soared 2.36%, reaching 23,368.35, while the Sensex jumped by 1,750.37 points, closing at 76,907.63. This bullish momentum was further supported by a rally across Asian markets, indicating strengthened investor confidence.
Positive Global Influences
The upward trajectory in the Indian markets was largely influenced by favorable developments in the U.S. trade policy. U.S. authorities announced exemptions from tariffs on essential electronics, including smartphones and computers, which eased market anxieties. According to Vikas Jain, Head of Research at Reliance Securities, the recent dip in the U.S. Dollar Index—now at a three-year low—has also contributed to this market optimism.
- Nifty 50: Up 2.36%
- Sensex: Increased by 1,750.37 points
- VIX: Volatility index dropped nearly 17%
Asian Markets Follow Suit
The rally in Asia was particularly pronounced in Japan, where major automakers like Toyota and Honda pushed indices up by 1%. The S&P 500 in the U.S. also showed solid performance, with the Dow Jones gaining over 300 points and the Nasdaq rising by 0.64%. Other Asian markets mirrored this growth:
- South Korea’s Kospi: Up 0.94%
- Australia’s ASX 200: Increased by 0.38%
- Taiwan’s Taiex: Surged nearly 2%
Conversely, China’s Shanghai Composite remained relatively unchanged, dipping slightly by 0.07%.
Tariff Exemptions and Their Impact
The recent announcement by the Trump administration to exempt various electronics from tariffs could shield consumers from potential price hikes while benefiting tech giants like Apple and Samsung. Key items that will see relief include smartphones, laptops, and semiconductor equipment. This exemption is expected to bolster companies involved in chip manufacturing, including Taiwan Semiconductor, which is expanding its operations in the U.S.
However, the optimism may be short-lived, as President Trump hinted at possible adjustments to tariff rates in the near future, specifically concerning imported vehicles and auto parts.
Currency Market Movements
Amidst these developments, the Indian rupee gained ground against the U.S. dollar, opening 20 paise higher at 85.85. This rise was spurred by a significant drop in the dollar index, which has seen a decline of 4.22% over the past five trading sessions.
Oil Prices on the Rise
In the commodities market, oil prices saw a modest increase, with Brent crude priced at $65.15 and WTI at $61.79. The rise is attributed to tariff relief and an uptick in Chinese crude imports, although concerns about global economic growth continue to cast a shadow over the sector.
Conclusion
Overall, the combination of positive global cues, relief from tariffs, and a strengthening rupee has created a favorable environment for the Indian stock market. Investors remain optimistic about the medium-term outlook as market volatility appears to be on the decline.
