The Indian stock markets rallied on Tuesday after the United States announced a pause on tariff hikes for Canada and Mexico. The Sensex gained 1,397 points, or 1.81 percent, to reach 78,583.81, while the Nifty increased by 378.20 points, or 1.62 percent, to close at 23,739.25. This rally led to a substantial gain of Rs 4.73 lakh crore in investor wealth.
The positive sentiment was driven by global cues, a stronger rupee, and robust activity in the auto sector. President Donald Trump’s unexpected suspension of tariffs played a crucial role in boosting market sentiment globally. A declining US dollar added to the positive sentiment, making investments in emerging markets like India more attractive.
Favorable performance in other Asian markets further strengthened investor confidence in Indian equities. The automotive sector saw significant gains, driven by steady sales growth, which reinforced investor optimism. On the sectoral front, except for FMCG, all other indices ended in the green.
Market surge after tariff suspension
Nifty PSU Bank, Infra, Energy, and Oil & Gas each rose by 2 percent. The Nifty Midcap index added 1.6 percent, while the Smallcap index increased by 1 percent.
Among the top gainers on the Nifty were Shriram Finance, L&T, Adani Ports, Bharat Electronics, and IndusInd Bank. On the other hand, Trent, Britannia Industries, Hero MotoCorp, Nestle India, and Eicher Motors were among the biggest losers. Shrikant Chouhan, Head Equity Research at Kotak Securities, noted that the market cleared the 23,500/78,800 resistance zone post-gap-up opening, leading to intensified positive momentum.
Ajit Mishra, SVP of Research at Religare Broking, highlighted that a firm break above the 23,620 level in the Nifty has further strengthened the bulls’ position, with the next target range at 23,900–24,200. The Indian rupee ended 12 paise higher at 87.07 per dollar on Tuesday compared to Monday’s close of 87.19. In conclusion, the February 4, 2025, trading session was highly optimistic for Indian markets, driven by positive global cues and sectoral strength, particularly in energy and banking stocks.
The prevailing positive sentiment, together with strategic buying, suggests an encouraging outlook for the markets.
