Tariff Exemptions on Electronics, Positive Global Sentiment Drive Market Surge
Indian equity markets witnessed a powerful rally on Tuesday, with benchmark indices Sensex and Nifty jumping over 2% amid robust global cues and a temporary pause on US tariffs targeting electronics imports. Following a trading holiday on Monday, the domestic markets opened with a strong upward gap, supported by heavy buying in financials, autos, and IT stocks, leading to an across-the-board sectoral rally.
The BSE Sensex surged by 1,750.37 points or 2.32% to an intraday high of 76,907.63, while the NSE Nifty rose 539.80 points or 2.36% to touch 23,368.35. All 13 major sectoral indices traded in the green, marking a broad-based rally. The rally also extended to the broader market, where Nifty Smallcap gained 2.57% and Midcap climbed 2%.
Highlights:
Sensex and Nifty rise over 2%, highest single-day gain in over a month.
All sectoral indices in green, with financials up 2.2%.
Smallcap and midcap indices rise 2.57% and 2%, respectively.
Strong global sentiment and temporary US tariff relief act as key catalysts.
Trump’s Tariff Relief Lifts Global Markets and Boosts Domestic Confidence
A major driver behind the rally was US President Donald Trump’s announcement of temporary tariff exemptions on consumer electronics including smartphones, PCs, and laptops, as part of a broader adjustment to his 125% tariff proposal on Chinese goods. Trump also suggested possible import duty relief for vehicles and auto parts, further improving sentiment across equity markets worldwide.
Although Trump later clarified that affected items would be shifted to a different tariff category, the pause signaled a softer stance in the ongoing trade tensions with China, raising hopes of renewed negotiations. Global indices gained 3–4% between Friday and Monday, reflecting relief across Wall Street and Asian markets, with tech stocks leading the charge.
Highlights:
Trump’s pause on electronics tariffs boosts risk appetite globally.
Additional hints at auto import duty relief support global auto stocks.
Move interpreted as softening of US-China trade tensions.
Global indices in Asia and Europe traded higher on easing trade war fears.
Strengthening Rupee and Declining Volatility Add Tailwinds to Domestic Market
The Indian rupee appreciated by 39 paise to trade at 85.71 per dollar, supported by strong equity inflows, weakening US dollar index, and lower international crude oil prices. At the same time, the India VIX dropped 16.6% to 16.77, a sharp decline indicating reduced investor anxiety and paving the way for further bullish momentum.
Market strategists interpreted the drop in volatility as a positive sign, suggesting that the worst phase may be behind for medium-term investors, especially given the improving breadth of the rally.
Highlights:
Rupee strengthens on weak dollar, firm equities, and lower crude prices.
India VIX plunges 16.6%, signaling diminished market nervousness.
Analysts suggest market breadth indicates medium-term bottom is in place.
Technical resistance now eyed at 23,300–23,800 levels on Nifty.
Sectoral Momentum: Banks, Autos, and Large-Caps Lead the Market Charge
Financials and large-cap stocks led the rally, with the Nifty Bank index climbing 2.35% to reclaim the 52,000 mark. Private sector lenders HDFC Bank and ICICI Bank gained nearly 3% each, supported by expectations of stable margins amid declining deposit rates. Tata Motors, Larsen & Toubro, and IndusInd Bank were among the other top contributors to index gains.
Jefferies analysts cited easing margin pressures and strong loan growth as tailwinds for the banking sector. In the broader market, positive momentum extended to infrastructure, capital goods, and auto sectors, aligning with Trump’s comments on possible auto duty relief.
Highlights:
HDFC Bank and ICICI Bank rally nearly 3% each.
Nifty Bank surpasses 52,000; sector gains 2.35%.
Tata Motors, L&T, and IndusInd Bank among top gainers.
Positive readthrough for auto and infra stocks from global tariff moves.
Technical Views Suggest More Upside, Though Resistance Lies Ahead
Technical analysts remained optimistic, though cautious near key resistance levels. Immediate resistance for Nifty is seen at 23,200–23,300, with further levels at 23,360 and 23,500. Support is pegged at 22,800–22,500, followed by 22,200. Analysts advise a buy-on-dips strategy near support levels.
For Bank Nifty, key supports lie at 51,000 and 50,500, aligning with the 200-day SMA. Upside targets range between 51,800 and 52,500, provided the index remains above critical support zones.
Highlights:
Nifty resistance at 23,200–23,500; support at 22,500–22,000.
Bank Nifty supported at 51,000 and 50,500; resistance at 52,500.
Technical experts recommend trend-following and dip-buying strategies.
Market action signals a potential continuation of bullish sentiment.
