The Indian stock market experienced a dramatic upswing on Tuesday, with benchmark indices Sensex and Nifty each surging by 2%. The sharp rally, which added a staggering ₹8 lakh crore to investor wealth within minutes, was driven by positive global developments. A major catalyst came from the United States, which softened its trade stance on China late last week. The US government announced exemptions on tariffs for electronic items such as phones and computers, triggering a global rally in equities on Monday. With Indian markets closed for a public holiday, Tuesday became a catch-up session for domestic investors.
Vinit Bolinjkar, Head of Research at Ventura, noted that Dalal Street witnessed a strong rebound, with the Nifty 50 breaching the 23,300 mark and the Sensex rallying over 1,600 points. He attributed the gains to a combination of global optimism, short-covering by traders, and a sharp decline in volatility—reflected in a 17% fall in the India VIX. This drop in the fear gauge suggests improved investor sentiment and reduced uncertainty in the near term.
The rally was further supported by hopes of renewed trade dialogue following former US President Donald Trump’s 90-day pause on tariff hikes—a move interpreted as more of a strategic breather for the US than meaningful relief for trade partners. Additionally, a weakening US dollar, now below 100 on the DXY index, has led to outflows from US assets, with foreign institutional investors (FIIs) showing signs of returning to Indian equities. Domestically, the Reserve Bank of India’s stable inflation projections and balanced policy stance have also reinforced investor confidence.
On the performance front, the BSE Sensex climbed 1,575.47 points to settle at 76,732.73, while the NSE Nifty advanced 465.65 points to 23,294.20. Tata Motors led the rally among Sensex components, jumping 5% to ₹625. Other significant gainers included Larsen & Toubro, HDFC Bank, Mahindra & Mahindra, Adani Ports, and ICICI Bank, all of which rose more than 2.5%. Stocks like Bajaj Finance, Zomato, and IndusInd Bank also posted solid gains of around 2%. Meanwhile, the India VIX dropped 13.75% to 17.34, hinting at calmer days ahead for the market.
The surge in market capitalisation was equally impressive. As per BSE data, the total valuation of listed companies jumped from ₹4,01,55,574.05 crore last week to ₹4,09,53,659.93 crore—a gain of ₹7.98 lakh crore in just one trading session. Commenting on the market’s direction, Shrikant Chouhan, Head of Equity Research at Kotak Securities, stated that the worst may be over for now. He suggested that investors should consider a strategy of buying on dips near key support levels.
Looking ahead, corporate earnings will be the primary focus for Indian investors this week. However, global developments—particularly regarding tariffs and trade policy—will remain in the spotlight. A report by Nomura pointed out a dramatic 64% decline in US import bookings from China following the announcement of reciprocal tariffs. The data showed that some Chinese exporters saw their daily container shipments to the US drop from 40–50 containers to just 3–6, illustrating the real impact of escalating trade tensions. Key US data, including retail sales, industrial production, and weekly jobless claims, are also expected to influence market sentiment in the days ahead.
