On Friday, April 11, 2025, Indian equity markets experienced a significant rebound following U.S. President Donald Trump's announcement of a 90-day suspension on new reciprocal tariffs for countries excluding China. This move alleviated investor concerns over escalating global trade tensions, leading to a surge in major indices.
The BSE Sensex climbed 1,310.11 points, or 1.77%, closing at 75,157.26, while the NSE Nifty 50 advanced 429.40 points, or 1.92%, to settle at 22,828.55. Despite this strong finish, both indices recorded a modest weekly decline of 0.3%, marking the second consecutive week of losses.
The rally was broad-based, with significant contributions from financials and commodities. HDFC Bank and Kotak Mahindra Bank each gained over 2%, bolstering the financial sector. Metal stocks surged, with the Nifty Metal index rising over 4% during intraday trade, driven by a weaker dollar and tariff relief. Notable performers included Tata Steel, JSW Steel, and Hindalco Industries, posting gains between 3.9% and 4.2%. In the broader market, the BSE Midcap and Smallcap indices rose by 1.84% and 3.04%, respectively, reflecting positive investor sentiment across market capitalizations.
Investment firm Jefferies increased India's portfolio weighting by 2 percentage points, citing the country's minimal exposure to U.S. and China, low tariffs, declining oil prices, and the Reserve Bank of India's pro-growth policies. However, market analysts caution that valuations remain attractive but volatility is expected to persist amid evolving global trade policies.
Dharmesh Kant, head of equity research at Cholamandalam Securities, noted, "One thing being understood (by the market) is that you have to deal with an uncertain environment as far as policies and rates are concerned for an extended period of time." He anticipates volatile movements of plus or minus 5% to 7% for the benchmark Nifty 50.
The temporary suspension of U.S. tariffs provided a much-needed respite for Indian markets, enabling a strong end to the trading week. While this development has improved short-term sentiment, investors remain cautious due to ongoing global trade uncertainties and potential policy shifts.