India’s equity markets kicked off the holiday-shortened week with renewed energy, reflecting optimism from global cues and easing trade tensions. Riding the wave of strong overnight gains from Wall Street and an uptick in Asian markets, both the Nifty 50 and Sensex posted impressive rallies in the previous session, up nearly 2% each. This positive trend is continuing, with GIFT Nifty futures hinting at a gap-up start for April 15.
But what exactly is fuelling this surge? Let’s break it down and explore the factors that are currently shaping India’s equity market sentiment.
Asian Markets Shine on Tariff Exemption Buzz
Global markets, especially across Asia, have shown strong performance on hopes of temporary relief from U.S. tariffs. Japan’s Nikkei 225, South Korea’s KOSPI, and Singapore’s Straits Times Index climbed between 0.9% to 1.3%, supported by gains in tech and auto stocks. Even Taiwan’s benchmark index inched up around 1%, boosted by the White House’s signal that electronics could be temporarily exempt from President Trump’s 145% tariff plans.
This triggered a mini rally in tech-heavy counters globally. While Chinese indices showed a mixed bag amid an ongoing trade standoff with the U.S., the broader sentiment across Asia remained positive. However, uncertainties over the duration of these exemptions and future tariff decisions still loom, keeping markets on edge.
Indian Equities Ride Global Optimism But Stay Cautious
Back home, the Indian markets mirrored global enthusiasm. The rally was broad-based, with metal, pharma, and banking stocks leading the charge. Notably, the India VIX dropped over 6%, indicating a drop in near-term volatility and growing investor confidence.
Yet, experts are maintaining a guarded tone. Kotak Securities’ Amol Athawale suggests that positional traders should adopt a level-based approach, citing the 23,000 mark as a crucial resistance level. He adds, “If the Nifty stays above 22,500, we can expect further upside. But slipping below this support could dampen sentiment quickly.”
The technical charts do indicate strength, but given the global overhangs, this recovery may be fragile.
U.S. Tariffs, Tech Stocks & the Ripple Effect on Dalal Street
The current rally isn’t just about India. Apple’s boost to the S&P 500 and the broader exemptions for smartphones and computers have been welcomed globally, including in India. Indian tech giants and auto component exporters with exposure to U.S. markets stand to benefit if these exemptions are extended.
However, President Trump’s warning that such exemptions are temporary has introduced an air of caution. Market participants know well that trade policies can swing swiftly, and any sudden announcement could reverse gains overnight.
India’s IT and auto sectors will remain in focus this week, especially with U.S. tariff discussions dominating headlines. Any additional relief could further improve sentiment, while renewed restrictions may cause sharp intraday volatility.
What to Watch: Inflation Data, Q4 Earnings & Global Uncertainty
Apart from global trade cues, domestic triggers will also drive market movement. March’s retail inflation data, expected later today, will offer insights into the RBI’s future interest rate path. If inflation stays within target, it could provide more breathing space for equities.
Additionally, the Q4 earnings season is kicking off. Strong results, especially from banks and consumer-facing sectors, could bolster investor sentiment further. However, any miss on earnings expectations might trigger swift sectoral corrections.
Looking ahead, the Indian market’s direction will depend on a fine balance of global headlines and local fundamentals. Volatility is likely to remain a constant companion, and traders must brace for sudden twists.
Final Word
In this high-stakes environment, traders and investors must stay nimble. While the current momentum is encouraging, global uncertainties—especially around tariffs—could change the game overnight. For now, the mood is cautiously optimistic, and level-based strategies seem to be the way forward. Stay informed, stay alert—and most importantly, trade smart.
Disclaimer: The views and investment insights provided here are based on publicly available information and do not constitute financial advice. Readers are advised to conduct their own research or consult certified financial experts before making investment decisions.