Markets rebound after Trump's tariff pause; Sensex ends 1,310 points higher

Despite the rally, benchmarks ended the week 0.3 per cent lower

Indian equity benchmarks surged on Friday after US President Donald Trump unexpectedly rolled back certain tariff measures earlier in the week. However, gains were tempered by lingering concerns over escalating trade tensions between the US and China. 

The Sensex jumped as much as 2 per cent intraday before settling at 75,157.3, up 1,310 points (1.8 per cent). The Nifty closed at 22,829, gaining 429 points (1.9 per cent). This marked the Sensex’s sharpest single-day rise since February 4 this year and the Nifty’s best performance since November 22, 2024. 

Despite the rally, both indices ended the week 0.3 per cent lower. The total market capitalisation of BSE-listed firms rose by ₹7.7 trillion to ₹401 trillion, though it declined by ₹1.8 trillion for the week. 

Earlier in the week, Trump announced a three-month pause on additional tariffs for nations engaging in trade negotiations, while maintaining a 10 per cent baseline import duty. The surprise move fuelled a global market rally on Wednesday. However, US indices slipped on Thursday as investor focus shifted back to the intensifying US-China trade conflict. China retaliated by raising tariffs on US imports from 84 per cent to 125 per cent, vowing to defend its economic interests. 

The dollar index fell to 99.7, its lowest since April 6, 2022, while the 10-year US Treasury yield dropped to 4.45 per cent, a February 2025 low. Gold hit a record high of $3,238 per ounce, reflecting heightened risk aversion. 

“The Indian market closed positively after a volatile week, aided by the US tariff pause,” said Vinod Nair, head of research at Geojit Financial Services. “However, the US-China trade war remains a key risk that could offset gains in emerging markets,” Nair added.

Analysts expect continued turbulence until the Fed takes steps to avert a US recession and US-China tensions ease. Investors will also monitor March-quarter earnings and management commentary from Indian corporates for further cues. 

 

Market breadth was strong, with 3,084 advancing stocks against 885 decliners. All but two Sensex stocks rose, with HDFC Bank (2.3 per cent) and Reliance Industries (2.8 per cent) leading gains. TCS (-0.4 per cent) lagged after disappointing fourth quarter (Q4) results. 

Foreign portfolio investors (FPIs) net sold shares worth ₹2,519 crore, while domestic institutions bought ₹3,759 crore worth of equities. 

“The rebound, supported by declining volatility, is encouraging, but sharp moves remain difficult to trade. A hedged approach is advisable until stability returns,” said Ajit Mishra, SVP of research at Religare Broking. 

All the BSE sectoral indices ended with gains, but the metal index gained the most at 4.3 per cent. The healthcare index also outperformed, while information technology and FMCG underperformed.  

While maintaining its neutral stance on India, HSBC in a note said: “India still has risks, but the outlook is improving. Although growth is likely to remain weak for a few quarters, valuations are lower, risks of further sharp earnings downgrades have moderated, inflation is falling, and rates are set to follow.”