In a strong comeback after Monday’s holiday, Indian stock markets witnessed a powerful rally on Tuesday, with benchmark indices Sensex and Nifty soaring over 2%, driven by positive global cues and a temporary tariff exemption announced by US President Donald Trump.

Markets open with a bang post-holiday

The BSE Sensex surged by 1,750 points to hit an intraday high of 76,907, while the NSE Nifty climbed by nearly 540 points, touching 23,368. The rally was broad-based, with all sectoral indices trading in the green. Leading the charge were banking, auto, and IT stocks, which attracted strong buying interest.

This sudden burst of optimism comes after a long weekend and was largely fueled by developments in the international trade space, particularly concerning US-China relations.

Trump’s tariff exemptions boost global and Indian markets

One of the key drivers behind today’s stock market rally was the announcement of temporary tariff relief on electronics by the United States. Over the weekend, US President Donald Trump declared that certain consumer electronics like smartphones, laptops, and PCs would be temporarily exempted from a proposed 125% tariff on Chinese goods, along with a 10% global flat rate on imports.

This move came as a big relief for global investors, especially those concerned about rising trade tensions and their impact on technology supply chains. In addition, Trump hinted at similar relief measures for the automotive sector, which has also been facing high import duties.

“This move is being seen as a significant softening of the US stance toward China, boosting global sentiment,” said market analysts.

Global indices across the US, Asia, and Europe posted strong gains of 3–4% over the last two sessions, creating a ripple effect that reached Indian shores today.

Investors still cautious despite positive momentum

Despite the upbeat mood, some caution prevailed among market participants after Trump later clarified that the exempted items are merely being shifted to a different tariff category. He also warned that new duties on imported semiconductors may be introduced later this week, signaling that trade tensions are far from over.

Nevertheless, the current momentum in the market suggests that investors are focusing on short-term relief and hoping for a more accommodative stance from the US government in the coming weeks.

Key takeaway: Temporary relief, lasting optimism?

While the tariff exemptions are temporary, they have managed to inject a much-needed dose of optimism into the global equity markets. The rally in Indian indices like Sensex and Nifty reflects the interconnectedness of global trade policies and domestic investor sentiment.

As the week progresses, market players will be closely watching any fresh announcements from the US administration, particularly related to the tech and semiconductor sectors.