Why markets rallied today? Tariff pause, trade negotiations key reasons

Stock Market Today: The Sensex today climbed 1,620 points intraday, while the Nifty rose 525 points. As India stock market rallies on Trump's decision to pause rally, here's what investors should do

Why are markets rising today: Indian stock markets rallied over 2 per cent on Friday, April 11, 2025, as US President Donald Trump’s announcement to pause the imposition of reciprocal tariffs for 90 days triggered a buying frenzy on Sensex and Nifty today.

 

The BSE Sensex, today, surged 1,620 points or 2.2 per cent to hit intraday high of 75,467 level. On the NSE, the Nifty index soared 525 points or 2.3 per cent to the day’s high of 22,924. As of 3:30 PM, the Sensex was up 1.77 per cent at 75,155.34, while the Nifty ended 1.92 per cent higher at 22,828.55.      

 

In the broader markets, the Nifty MidCap index gained 2.11 per cent and the Nifty SmallCap index 2.6 per cent.

 

According to market experts, the stock market rally today was on the back of an improved market sentiment where investors were relieved from the fact that India was one of the least impacted countries in the trade war. As things stand, China has been slapped with reciprocal tariffs of 145 per cent, whereas India has been exempted from the 26-per cent tariffs for 90 days.

 

This, coupled with the likely negotiations that India is doing with the US, has cheered investors as they anticipate India to benefit from ‘China+1’ theme, they said. 

Top Gainers Today

On the Sensex index, 29 of the 30 index stocks were trading with notable gains. These included Tata Steel shares (up over 5 per cent), Eternal shares, Tata Motors shares, Bajaj Finserv shares, HCL Tech shares, Sun Pharma shares, Bharti Airtel shares, M&M shares, Kotak Bank shares, Adani Ports shares, Infosys shares, L&T shares, Reliance Industries shares, and HDFC Bank shares (up 2 per cent).

 

On the Nifty index, apart from the above-mentioned stocks, Hindalco shares, JSW Steel shares, Adani Enterprises shares, Coal India shares, Cipla shares, Grasim Industries shares, Trent shares, ONGC shares, Dr Reddy’s Labs shares, Jio Financial Services shares, Shriram Finance shares, and Eicher Motors shares were ruling between 2 per cent and 4 per cent higher.

 

In the broader markets, PI Industries, Dixon Technologies, Bharti Hexacom, Cochin Shipyard, Sona Comstar, SRF, Oberoi Realty, Solar Industries, and SAIL were the top gainers today among mid-cap stocks, while PG Electroplast, Amber Enterprises, PVR Inox, Inox Wind, Sagility India, Anant Raj, Devyani International, Affle (India), and Tejas Networks were the top gainers today in the small-cap segment. These shares advanced up to 6 per cent on the NSE today.

 

Why are stock markets rising today; top reasons behind Sensex, Nifty rally:

 

Trump pauses tariffs:

On April 9, the Trump administration decided to pause reciprocal tariffs on 75 countries, including India, that had approached the United States for trade-related negotiations. While the 10-per cent unilateral tariffs across countries will continue to be imposed during this period, Trump said no reciprocal tariff will be collected from the said 75 countries for the next 3 months.

 

Trump tariff on China:

While India has been given a 90-day waiver from the reciprocal tariffs, the US has upped its ante against China and has imposed a 145-per cent tariff on the country. The 145-per cent tariff on China includes reciprocal tariffs of 125 per cent and 20 per cent tariffs for China’s alleged supply of fentanyl in the US.

 

In retaliation, China has been taking various steps to punish supply of US products in its country. For instance, China has decided to “reduce” the release of Hollywood films in China.

 

India eyes negotiations with the US:

Amid Trump’s pause on tariffs, reports suggest India is negotiating hard to crack a deal with the United States. According to US Secretary of the Treasury, Scott Bessent, trade negotiations are taking place with "China's neighbours" like Japan, South Korea, and India.

 

Further, another report suggested on Thursday that India has proposed to the US to lower tariffs on automobiles. In return, it has asked the US to provide concessions on agricultural products.

 

Stronger Rupee, falling oil prices:

India’s domestic currency opened higher on Friday, rising 45 paise to 86.24 against the US dollar. The rise in Indian Rupee was aided by a sharp decline in the dollar index and oil prices, amid rising US-China trade tensions. During the intraday trade, Rupee hit a high of 85.955 per US dollar.

 

A stronger rupee makes investments by foreign investors lucrative in rupee-denominated securities, likely supporting FII inflows.

 

That apart, falling oil prices, too, support India’s current account deficit as it reduces the import bill. At present, Brent crude oil is trading at $63.46 per barrel-mark. 

ALSO READ | Pharma stocks surge as Trump puts 90-day hold on planned tariffs 

Stock Market Rally: Will it sustain?

According to VK Vijayakumar, chief investment strategist at Geojit Investments Limited, the gap-up opening in the Nifty this morning is unlikely to sustain beyond a point given the elevated uncertainty in global markets.

 

“President Trump’s retreat from the reciprocal tariffs imposed on countries except China, was forced by the US bond market where, instead of safe-haven buying in US treasuries, there was big selling, pushing the 10-year bond yield up to 4.5 per cent. There is no room for a sustained rally in the market in the present uncertain context,” he said, advising investors “to be cautious and prioritise safety over returns”.

 

From a long-term perspective, however, analysts at Emkay Global believe multiple bilateral treaties could be signed over the next 90 days, ultimately leading to a tariff regime that is “only a little more autarchic than in the past”. This, analysts said, rules out a deep US recession, though a mild slowdown is still possible.

 

“The stars are now aligning for a strong rally for India. Earnings estimates are bottoming out and we expect the downgrade cycle to arrest. Valuations have also corrected – not only for the aggregate Nifty but also for more granular metrics like the median PER for BSE 500. The improved visibility for the US economy is an additional positive. We now expect small and mid-cap stocks to reverse their strong underperformance vs large-caps,” the brokerage said.

 

Market Strategy: What should investors do now?

Jitendra Gohil, chief investment strategist at Kotak Alternate Asset Managers suggests investors should not rush to buy equities but should gradually take positions in select sectors during corrections in the near-term.

 

“Domestic-focused large-cap names in Banking, NBFCs, Hotels, Hospitals, and even select midcaps with good earnings visibility can be considered. Invest with at least a 12-month-plus horizon, as the equity market may see more pain ahead,” he said.

 

Those at Emkay Global, meanwhile, are ‘Overweight’ on IT, and Materials. The brokerage has cut exposure to FMCG, and is ‘Underweight’ on Financials