Benchmark indices Nifty 50 and Sensex opened over 1.5% higher on Tuesday, rebounding from the previous session's sharp selloff as bargain hunting and a broader recovery across Asia lifted sentiment amid hopes of U.S. tariff negotiations. The rally also comes ahead of the Reserve Bank of India’s policy decision on April 9, with expectations of a 25 basis point rate cut.
The BSE Sensex zoomed over 1,200 points to trade above 74,300, after hitting an intraday high of 74,421. The Nifty 50 gained 350 points, to trade above 22,500 around 12:10 am, touching a high of 22,577 in early trade.
Meanwhile, the total market capitalisation of BSE-listed companies rose by Rs 4.61 lakh crore to Rs 393.86 lakh crore.
The Nifty Consumer Durables index jumped 3%, while Metal, Realty, and Financial Services indices advanced over 2%. In the broader market, the Nifty Midcap 100 and Smallcap 100 traded 2% higher. Meanwhile, India’s fear gauge, the Volatility Index (India VIX), fell 10.2% to 20.47.
Key factors behind the surge:
1) Rebound in global markets
Indian equities rallied alongside a rebound across Asia as investors pinned hopes on a possible softening of the U.S.'s aggressive tariff stance.
Japan’s Nikkei led the gains with a 5.6% jump after Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer were tasked with negotiating with Tokyo.
While U.S. President Donald Trump reiterated plans to impose additional 50% tariffs if China did not back down, Beijing rejected the “blackmail nature” of the threats. Despite tensions, Hong Kong’s Hang Seng rose 1.7%, and China’s blue-chip index gained 0.6%, offering relief to global markets.
2) RBI policy decision
Markets are also reacting ahead of the RBI’s monetary policy decision due April 9. The central bank is expected to cut the repo rate by 25 basis points, with analysts forecasting a more accommodative stance as global trade tensions weigh on growth.
3) Buying the dip
Rally in the equity markets also comes as investors capitalize on recent declines, with the Nifty index down over 14.8% from its peak. The mid-cap and small-cap indices have also corrected by around 19% and 22%, respectively.
4) Drop in crude oil prices
Crude oil prices fell below the $65 mark on Monday, its lowest since August 2021, led by concerns that U.S. tariffs might depress demand and lead to a global recession.
Brent crude was trading at $65.07 per barrel on Tuesday, while U.S. West Texas Intermediate (WTI) was at $61.57 around 10:16 am IST.
5) Falling U.S. bond yields and weaker Dollar boost sentiment
The U.S. 10-year Treasury yield fell to 4.14% from around 4.5% in mid-February, while the 2-year yield declined to 3.715% from 4.28%. Meanwhile, the U.S. Dollar Index stood at 102.92, supporting positive sentiment in emerging markets like India.
A weaker dollar and lower U.S. bond yields make Indian equities more attractive to foreign investors, potentially driving higher inflows into the market.
The BSE Sensex zoomed over 1,200 points to trade above 74,300, after hitting an intraday high of 74,421. The Nifty 50 gained 350 points, to trade above 22,500 around 12:10 am, touching a high of 22,577 in early trade.
Meanwhile, the total market capitalisation of BSE-listed companies rose by Rs 4.61 lakh crore to Rs 393.86 lakh crore.
The Nifty Consumer Durables index jumped 3%, while Metal, Realty, and Financial Services indices advanced over 2%. In the broader market, the Nifty Midcap 100 and Smallcap 100 traded 2% higher. Meanwhile, India’s fear gauge, the Volatility Index (India VIX), fell 10.2% to 20.47.
Key factors behind the surge:
1) Rebound in global markets
Indian equities rallied alongside a rebound across Asia as investors pinned hopes on a possible softening of the U.S.'s aggressive tariff stance.
Japan’s Nikkei led the gains with a 5.6% jump after Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer were tasked with negotiating with Tokyo.
While U.S. President Donald Trump reiterated plans to impose additional 50% tariffs if China did not back down, Beijing rejected the “blackmail nature” of the threats. Despite tensions, Hong Kong’s Hang Seng rose 1.7%, and China’s blue-chip index gained 0.6%, offering relief to global markets.
2) RBI policy decision
Markets are also reacting ahead of the RBI’s monetary policy decision due April 9. The central bank is expected to cut the repo rate by 25 basis points, with analysts forecasting a more accommodative stance as global trade tensions weigh on growth.
3) Buying the dip
Rally in the equity markets also comes as investors capitalize on recent declines, with the Nifty index down over 14.8% from its peak. The mid-cap and small-cap indices have also corrected by around 19% and 22%, respectively.
4) Drop in crude oil prices
Crude oil prices fell below the $65 mark on Monday, its lowest since August 2021, led by concerns that U.S. tariffs might depress demand and lead to a global recession.
Brent crude was trading at $65.07 per barrel on Tuesday, while U.S. West Texas Intermediate (WTI) was at $61.57 around 10:16 am IST.
5) Falling U.S. bond yields and weaker Dollar boost sentiment
The U.S. 10-year Treasury yield fell to 4.14% from around 4.5% in mid-February, while the 2-year yield declined to 3.715% from 4.28%. Meanwhile, the U.S. Dollar Index stood at 102.92, supporting positive sentiment in emerging markets like India.
A weaker dollar and lower U.S. bond yields make Indian equities more attractive to foreign investors, potentially driving higher inflows into the market.
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