Sensex, Nifty surge over 2%: 5 reasons behind market rally

Indian equity markets rallied sharply on Tuesday, with the Sensex soaring over 1,750 points and the Nifty crossing 23,350 in early trade — wiping out all losses suffered since US President Donald Trump’s April 2 tariff announcement, a Bloomberg report said. Further, investors witnessed a significant rise in their wealth, with Rs 18.42 lakh crore added to their portfolios in just two days, fueled by a strong rally in the equity markets.
The market closed in greens with BSE benchmark Sensex ending the day at 76,734.89, up 1577.63 points or 2.10%. Nifty50 also reached 23,328.55 gaining 500 points or 2.19%.
Also read: Investors gain Rs 18.42 lakh crore in 2-day market rally as global cues spark optimism
From BSE' 30 share pack IndusInd Bank, Tata Motors, L&T, Axis Bank, Adani Ports, HDFC Bank emerged as the gainers, while HUL and ITC lagged at the bottom.
Markets had been reeling under the weight of steep US retaliatory tariffs. Trump’s 90-day pause on reciprocal tariffs not only offers temporary relief but signals a potential shift toward negotiation over confrontation.
“This move is being seen as a significant softening of the US stance toward China, boosting global sentiment,” said Vikas Jain, head of research at Reliance Securities.

A cocktail of global and domestic tailwinds — most notably Trump’s temporary tariff exemptions on electronics — reignited risk appetite across global bourses.
1. Trump pauses tariffs on electronics
Trump’s surprise announcement to exempt consumer electronics — including smartphones, laptops, and computers — from his sweeping tariff plan provided immediate relief to global tech and electronics sectors.
Indian exporters like Dixon Technologies and Kaynes Technology jumped 2.6% and 5.5%, respectively.
“Trump’s move significantly reduces near-term uncertainty for electronics supply chains,” said an analyst tracking the sector.
2. India steps into the spotlight as global trade tensions rise
As per a Bloomberg report, investors are calling Indian markets a relative safe haven as Trump’s tariffs escalate global uncertainty. With a strong domestic economy, India is seen as better positioned than many peers to weather a potential global downturn.
“We remain overweight India in our portfolios,” said Gary Dugan, chief executive officer of The Global CIO Office. Supported by good domestic growth and aided by a likely diversification of supply chains away from China, Indian equities are seen as a safer bet over the medium term, he said.
As the US-China trade war heats up, India is gaining attention as a potential manufacturing alternative to China. Unlike Beijing’s retaliatory stance, New Delhi has opted for a softer approach—pursuing a provisional trade deal with the Trump administration, the Bloomberg report said.

In a double boost, Trump also hinted at possible exemptions from the existing 25% tariffs on foreign automobiles and parts.
Tata Motors rallied nearly 5%, while auto part makers like Samvardhana Motherson and Sona BLW surged over 7%.
“The pause gives breathing room to auto supply chains and lifts the fog of unpredictability,” Bharath Rajeswaran told Reuters.
Also read: India's retail inflation logs 3.34% in March 2025, nearly 6-year low

Major banks — HDFC Bank, ICICI Bank, and IndusInd Bank — logged big gains, helping the broader market rally.
HDFC Bank’s move to reduce savings account interest rates helped ease investor concerns over net interest margins.
“Banking stocks acted as domestic anchors amid global noise,” said a fund manager tracking financials.

US and Asian markets were solidly in the green, reflecting renewed confidence after Trump's tariff rollback.
US indices gained 3–4% between Friday and Monday. Asian peers like Nikkei and Kospi followed with similar momentum.
“The rally in global equities created a supportive backdrop for India's risk assets,” noted Gary Dugan of The Global CIO Office.
Also read: India's retail inflation logs 3.34% in March 2025, nearly 6-year low

While the rebound is impressive, the rally is built on temporary relief, not resolution. With US elections ahead and China still excluded from tariff rollbacks, volatility could return.
Still, India’s strong domestic demand, limited exposure to US trade, and status as a rising alternative to China in global manufacturing make it a standout in turbulent times.

Investors will be watching for: