Indian equity markets galloped in trade on April 11, holding on to gains after a solid gap-up start in early deals. The stellar gains, which were also seen across global markets in the previous session, came on the back of Trump’s decision to delay the imposition of reciprocal tariffs for 90-days on all trade partners, except China.
Since the Indian equity market was closed for a holiday in on Thursday, investors hopped on a buying spree as trading resumed today.
While this pause is not absolute as a 10% blanket tariff still applies to all US imports, it did leave time in hands of countries including India, to negotiate terms with the US. This especially bodes well with India, sparking hopes of the two countries coming to terms on a bilateral trade agreement (BTA) before the timeline ends.
In addition to that, Trump also doubled down on China, raising tariffs to 145% after the latter retaliated with an 84% tax on US imports. Domestic equities also basked in optimism that Trump’s decision to lower tariffs on India and increase those on China, and Hong Kong may come to the former’s benefit.
With easing nerves, India VIX, the fear barometer, tanked 11% to levels below 19, hinting reduced investor anxiety.
Around mid-trade, the 30-stock Sensex was up 2.2% at 75,459.57 while the Nifty rose 2.3% to 22,918.80.
Moving in tandem with the benchmarks, the broader market, which houses small and midcap stocks also logged in strong gains. The Nifty Midcap 100 and Nifty Smallcap 100 indices recorded an over 2% uptick.
While the latest set of developments were a likely positive for India, the sea of uncertainty still prevails. Trump’s recent flip-flops on the trade policy has heightened market uncertainty, with plans to impose aggressive reciprocal tariffs and fighting with China adding on to the pressure.
Meanwhile, growing fears of a US recession and its potential ripple effects on the global economy are likely to keep investors on edge. The implications for India’s growth trajectory remain a key concern amid this evolving landscape.
“There is no scope for a sustained rally in such an uncertain global environment. That said, India’s macroeconomic fundamentals remain strong, and we are relatively insulated from the ongoing trade tensions,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
