Nifty tops 25k, Sensex soars 1,200 pts on Trump's claim of India tariff cut

Why are markets rising today? | On the NSE, the Nifty index soared 450 points or 1.8 per cent to the day's high of 25,116

Why are Sensex, Nifty rising today? The Indian equity market gained ground after a subdued trading session, following remarks by US President Donald Trump that India has offered to reduce tariffs on US goods, easing trade tensions between the two countries.

 

After seeing a rangebound trade till midday, the BSE Sensex, surged over 1,300 points or 1.7 per cent to hit an intraday high of 82,718 points. On the NSE, the Nifty index soared 450 points or 1.8 per cent to the day’s high of 25,116. 

 

The 30-stock Sensex index settled at 82,531 level, jumping 1,200.18 points or 1.48 per cent. Meanwhile, the Nifty50 ended at 25,062, up by 395 points or 1.6 per cent.  The broader market indices, however, underperformed the benchmarks. The Nifty MidCap and the Nifty SmallCap indices closed 0.7 per cent and 0.5 per cent higher, respectively. All the sectoral indices closed in the positive territory, led by the Nifty Auto, Realty, and Metal indices.   

 

 

Furthermore, the market breadth remained skewed in favour of buyers. About 2,640 stocks rose, 1,327 declined, while 147 remained unchanged on the BSE.    

 

Why did markets see a sudden rally today? Key reasons behind the Sensex, Nifty rally today:

 

India-US trade update: The markets saw a renewed rally after reports emerged that the US President said that India has offered to drop all tariffs on the US, easing the tension of a trade war. 

 

In an event with the business leaders in Qatar, Trump said that India has “offered us a deal where basically they are willing to literally charge us no tariff,” according to a Bloomberg report. However, Trump did not disclose any details regarding the latest talks with the South Asian country. 

 

Trump has floated this idea before, however, the Government of India has not made any comments on Trump's remarks.

 

  India’s trade minister is expected to meet Trump administration officials from May 17-20 for further negotiations, according to the report. 

 

If it’s true that India has offered zero import duty for US goods, it’s a very positive move for the Indian economy and markets," said Chokkalingam G, founder of Equinomics Research. "Even if the US doesn’t reciprocate, maintaining the status quo on duties would be a win, as it removes the fear of higher tariffs on Indian exports. Plus, India remains cost-competitive in low-end products where the US isn’t. The kind of US goods that would come in—like high-end motorbikes or premium liquor—won’t threaten local businesses or overwhelm the domestic market."

 

This comes as a relief, as tensions escalated after India, earlier this week, proposed to impose retaliatory duties under the WTO (World Trade Organisation) norms against the US over American tariffs on steel and aluminium. Earlier in April, India had sought consultations with the US under the WTO's safeguard agreement, following American authorities' decision to impose these tariffs.

 

Defence rally continues: The rally in the defence stocks continued on Thursday, with the market capitalisation of the Nifty Defence index gaining over ₹1 trillion to ₹10.4 trillion since the Pahalgam attack on April 22. The index was up 3.13 per cent as as 1:30 PM, extending its rally for the fourth straight day. 

 

By midday, Astra Microwave Products was the top gainer in the index (up 8.8 per cent), followed by Cochi Shipyard (up 6.5 per cent), Zen Technologies (5up  per cent), and Garden Reach Shipbuilders (up 4 per cent).  

 

Easing India-Pakistan tensions: Experts said that markets were also buoyed by easing tensions on the border with Pakistan after agreeing on a ceasefire. 

 

Top gainers: On the Nifty 50, Hero MotoCo (up 4.68 per cent), followed by JSW Steel, Tata Motors, Shriram Finance, and Adani Ports were trading higher, while losses were capped by Power Grid (down 1.52 per cent), followed by NTPC, Cipla, IndusInd Bank, and Infosys.