Markets surge as Trump eases tariff concerns; Realty leads gains

Equity markets rallied sharply on Tuesday, posting over 2 per cent gains as investors cheered US President Donald Trump’s decision to exempt smartphones and other electronics from tariffs on Chinese goods. The benchmark Sensex surged 1,577.63 points (2.10 per cent) to close at 76,734.89, while the Nifty climbed 500 points (2.19 per cent) to settle at 23,328.55.

The rally was broad-based with all sectoral indices trading in positive territory. The Nifty Realty index emerged the top performer, surging 5.75 per cent, followed by auto which gained 3.4 per cent and metal which rose 3 per cent. Banking, IT, infrastructure, oil & gas and pharma sectors also advanced more than 2 per cent.

“The rally was driven by optimism around the deferral of tariffs and the recent exemptions on select products, raising hopes for potential negotiations that could ease the overall impact on global trade,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Market participants noted that Trump’s suggestion about possible exemptions for the 25 per cent levies on automobiles contributed significantly to the rally in auto stocks. “Markets opened sharply higher on mostly positive global cues after the U.S. removed smartphones and other electronics from its tariffs on China. Trump also suggested he might grant exemptions on the 25 per cent levies for automobiles that are already in place, leading to sharp rally in auto stocks,” said Satish Chandra Aluri from Lemonn Markets Desk.

Gainers and losers

Among the top gainers on the NSE, IndusInd Bank led the chart, surging 6.67 per cent to close at ₹735.50. It was followed by Shriram Finance, which rose 5.17 per cent to ₹671.85, Tata Motors gaining 4.61 per cent to ₹622.50, Larsen & Toubro advancing 4.59 per cent to ₹3,259.00, and Axis Bank climbing 4.35 per cent to ₹1,115.50. ITC was the sole loser among Nifty stocks, declining marginally by 0.28 per cent to close at ₹420.35.

The broader markets outperformed the benchmark indices, with the Nifty Midcap 100 index rising by 2.92 per cent and the Nifty Smallcap 100 index surging by 3.08 per cent. Market breadth was overwhelmingly positive with 3,266 advances against 833 declines on the BSE, while 91 stocks hit their 52-week highs.

Market volatility cooled off significantly, with the India VIX falling 19.81 per cent to 16.12, indicating reduced fear among investors. Foreign Institutional Investors (FIIs) were net buyers to the tune of ₹6,066 crore, while Domestic Institutional Investors (DIIs) were net sellers at ₹1,952 crore.

On the technical front, Rupak De, Senior Technical Analyst at LKP Securities, said, “The index has formed a Hanging Man pattern on the daily chart, indicating a possible pause in the current rally. On the other hand, the index closed above the 100-EMA on the daily chart, which suggests continued positivity. Additionally, the RSI has just entered a positive crossover.”

Similarly, Hardik Matalia, Derivative Analyst at Choice Broking, observed, “On the daily chart, the Nifty index formed a Hanging Man candle, which indicates potential weakness in the ongoing uptrend and the possibility of profit booking or a short-term reversal if the index fails to hold above key support levels.”

Shrikant Chouhan, Head Equity Research at Kotak Securities, suggested that while the market sentiment remains bullish, some profit-taking could emerge at higher levels. “For traders, 23400/76900 and 23500/77300 would act as key resistance areas, while 23200-23135/76400-76100 could serve as crucial support zones.”

Rupee gains

The Indian rupee gained against the dollar, appreciating by 0.35 rupees to close at 85.75. “Rupee traded positive with gains of ₹0.35 at 85.75, marking its second consecutive session of strength following a sharp recovery from the recent low of 86.80 seen on April 9, 2025,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities. “The rebound has been largely driven by a sharp decline in the dollar index over the past few sessions, which has provided substantial support to emerging market currencies, including the rupee.”

In commodities, gold remained firm as ongoing weakness in the dollar index supported safe-haven demand. “Gold remained firm within a positive range as ongoing weakness in the dollar index and persistent tariff-related uncertainty sustained safe-haven demand and long positions,” noted Trivedi. “In Comex, gold held its ground above the key support at $3200, with visible resistance emerging near $3255. Domestically, MCX gold traded flat around ₹93,350, as gains were capped by rupee appreciation.”

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, highlighted the positive technical indicators for the Nifty. “Nifty is now placed at the edge of upside breakout of the hurdle of 200-day EMA around 23360 levels. The huge unfilled opening upside gaps of the last few sessions indicate bullish runaway gaps, which are normally formed in the middle of a trend.”

Looking ahead, analysts expect the market to maintain its positive bias. “Going ahead, we expect index to maintain positive bias and head towards 23,560 in the coming sessions week being the current month high,” said Bajaj Broking Research. “Volatility is expected to remain elevated amid Tariff related development and the progress of the Q4 earnings season.”