Indian Stocks Surge as US Pauses Reciprocal Tariffs

Indian stock markets rallied on Friday, spurred by the US halting reciprocal tariffs on various countries for 90 days. This respite sent the Sensex and Nifty soaring. Experts caution that future trade negotiations and economic conditions are pivotal in shaping potential challenges and opportunities for investors.

In a significant market recovery, Indian stock indices surged on Friday, buoyed by President Donald Trump's decision to pause reciprocal tariffs for 90 days on numerous countries, including India. The Sensex closed at 75,157.26 points, marking a gain of 1,310.11 points or 1.77%, while the Nifty ended at 22,828.55 points, up by 429.40 points or 1.92%. Notably, the Nifty metal, consumer durables, and oil and gas indices led the sectoral gains.

According to Vinod Nair, Head of Research at Geojit Investments Limited, "An unexpected pause on reciprocal tariffs by the US provided relief amidst the prevailing uncertainty. Developments in bilateral trade negotiations are crucial as they could impact export-driven sectors in the short term. A supportive domestic environment, coupled with easing interest rates and mild inflation, is driving investors towards balanced portfolios, potentially offering a better risk-reward in the long run." Trump's tariff suspension excludes China, which still faces a 125% tariff.

Friday's rally was a significant turnaround from the dramatic sell-off triggered by Trump's initial reciprocal tariffs announcement, which had sent shockwaves through global equity markets. The earlier announcement led to widespread concern over trade tensions and potential economic recession. Since beginning his second term, Trump has consistently emphasized tariff reciprocity, intending to match tariffs imposed by other countries to ensure fair trade.

(With inputs from agencies.)