The Indian stock market experienced a remarkable surge on Friday, fueled by optimism following U.S. President Donald Trump’s announcement of a 90-day suspension on tariffs for India. This unexpected move has sparked investor enthusiasm, leading to significant gains across major indices during early trading hours. The Nifty 50 opened at 22,695 and soared to an intraday high of 22,874, marking a notable increase of 475 points or 2.12%. Meanwhile, the BSE Sensex jumped from an opening of 74,835 to a high of 75,319, witnessing an impressive rally of over 1,400 points.
Market Highlights
- Bank Nifty began the day with a gap-up at 50,634, reaching an intraday peak of 51,066, reflecting a robust gain of 826 points shortly after the market opened.
- Broad market participation was evident, with the BSE Small-cap index rising over 2.50% and the Mid-cap index climbing more than 1.75%.
- As of 11:00 AM, 285 BSE-listed stocks hit their circuit limits, with 184 shares reaching their upper circuit while 101 stocks faced lower circuit limits. Additionally, 44 stocks achieved 52-week highs, and 24 stocks recorded 52-week lows.
What’s Driving the Stock Market Surge?
Market analysts attribute this bullish trend to several key factors:
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Trump’s Tariff Suspension: The primary driver behind this rally is President Trump’s decision to pause the imposition of heavy reciprocal tariffs, excluding China, for a period of 90 days. This exemption for Indian exports has invigorated investor sentiment on Dalal Street.
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RBI’s Rate Cut: The Reserve Bank of India (RBI) announced a 25 basis points repo rate cut, which is expected to encourage liquidity in the market. Analysts noted that the RBI’s forecast of 4% inflation for FY26 has also contributed to the positive sentiment.
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Optimistic Q4 Earnings Outlook: There is growing anticipation for strong earnings in Q4 FY25, particularly from the banking sector, which is expected to indicate sustained industrial demand.
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Short-Covering by Bears: Following a decline in the market earlier in the week, many investors who had taken short positions rushed to cover them as the market rebounded, adding to the upward momentum.
- Shift from China to India: With the ongoing global focus on reducing reliance on China, particularly in sectors like semiconductor manufacturing, many foreign institutional investors (FIIs) are turning towards Indian markets, leading to a “sell China, buy India” sentiment.
Expert Insights
Sugandha Sachdeva, founder of SS WealthStreet, remarked that while the rally is promising, there could be resistance in the range of 22,900 to 23,100, suggesting investors should exercise caution given the unpredictable global trade environment.
Conclusion
As the Indian stock market continues to respond positively to the latest developments, investors should remain alert. The current boom presents opportunities but also comes with potential risks stemming from changes in global trade dynamics. Keeping an eye on upcoming economic indicators and earnings reports will be crucial for navigating this evolving landscape.
