Sensex, Nifty surge over 1% amid 90-day pause on Trump tariffs

Domestic stock markets gained over one per cent on Friday after US President Donald Trump announced a 90-day pause on tariffs for all countries, including India, except China. The BSE’s 30-share Sensex climbed 1.34 per cent, or 988.3 points, to open at 74,835.49. The broader Nifty 50 advanced 1.32 per cent, or 296.25 points, to open at 22,695.4. Domestic equity markets had remained closed on April 10 for Mahavir Jayanti.

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Sensex Surges as Indian Markets Rally Despite Asian Decline

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that since the Indian markets had closed for a holiday the previous day, they welcomed the relief as President Trump suspended the additional 26 per cent levy on India until July 9. The domestic markets rallied despite declines in Asian markets, which reflected fears of an escalating trade war between the US and China. The Nikkei 225 dropped 4.1 per cent, the Hang Seng slipped 0.17 per cent, and the KOSPI declined nearly 1 per cent.

On Thursday, US stocks and oil prices fell as investors worried that China would retaliate with higher tariffs in response to the US’s latest hikes. The US raised tariffs on Chinese goods to 145 per cent amid growing trade tensions. The tariff postponement followed severe turbulence in the $140 trillion global bond market, especially within the $47 trillion US fixed income segment. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, warned that the Nifty and Sensex’s strong opening might not sustain due to persistent global uncertainties.

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Trump Retreats Under Bond Pressure; Mid, Small Caps Gain

President Trump backed off from imposing reciprocal tariffs on all countries except China because the US bond market reacted with heavy selling instead of the usual safe-haven buying. This selling pushed the 10-year bond yield up to 4.5 per cent, forcing Trump to change his stance. The 10-year yield currently hovers around 4.46 per cent, while the dollar index has dropped to 100. Meanwhile, the Nifty Midcap 100 rose 1.77 per cent, and the Nifty Smallcap 100 jumped 2.27 per cent. Sector-wise, the Nifty IT index gained 1.75 per cent, and the Nifty Metal index advanced 2.93 per cent.

Vijayakumar emphasized that markets lack room for a sustained rally under the current global uncertainty. However, he reassured investors that India’s macroeconomic fundamentals remain strong, making it one of the least affected countries in the trade war. He advised investors to act cautiously and prioritize safety over high returns, recommending investments in fairly valued large-cap stocks.