Friday witnessed a 2% surge in the Indian stock market. Trump's tariff relief, a ber Rupee, cheaper crude oil, and progressing India-US trade talks boosted investor sentiment.
Stock Market: The Indian stock market experienced a significant rally on Friday, April 11th. Both the Sensex and Nifty indices surged by approximately 2% within just two hours, brightening investors' faces. This upswing was primarily driven by temporary relief from international trade tensions and improvements in economic indicators.
Sensex-Nifty Witness Impressive Surge
The BSE Sensex jumped 1,472 points, reaching a high of 75,319, while the NSE Nifty climbed 475 points to close at 22,874. This enthusiasm extended to the broader market, with the Nifty Midcap index rising by 1.5% and the Smallcap index by 2%.
Four Key Reasons for the Surge:
1. Donald Trump's 90-Day Tariff Relief
US President Donald Trump announced a 90-day postponement of reciprocal tariffs imposed on 75 countries, including India. This decision provided relief to investors and accelerated the buying momentum in the market. However, a 10% unilateral tariff remained in effect during this period.
2. Tough US Stance on China
The Trump administration imposed a total of 145% tariff on China, comprising 125% reciprocal and an additional 20%. This decision was taken in response to the supply of fentanyl from China to the US. In retaliation, China initiated measures to restrict American products, such as reducing the release of Hollywood films.
3. Progress in India-US Trade Talks
Negotiations regarding a trade agreement between India and the US have intensified. The US now seeks to establish new trade equations with Asian countries like India, Japan, and South Korea. Reports suggest India has sought concessions on agricultural products in exchange for reducing US tariffs on automobiles.
4. Stronger Rupee and Cheaper Crude Oil Prices
The Indian Rupee strengthened by 45 paise against the dollar on Friday, reaching 85.955. Simultaneously, crude oil prices fell to $63.46 per barrel. Both factors help control India's current account deficit and make the market more attractive for foreign institutional investors (FIIs).
