The Indian stock market extended gains for the second straight session on Tuesday, buoyed by positive global cues and easing trade tensions.
The Nifty 50 surged 2.36% to hit 23,368.35, while the Sensex climbed 1,750.37 points to 76,907.63. This comes after the Asian market extended its gains on Tuesday.
"This optimism is driven by a global market rally following positive developments in US trade policy and a sharp drop in the US Dollar Index, which has fallen to a 3-year low below the 100 mark," said Vikas Jain, Head of Research at Reliance Securities.
Volatility index VIX had fallen nearly 17% in the early hours of trading.
"Considering the breadth of the market, we believe it has likely experienced its worst phase for at least the medium term," said Shrikant Chouhan, Head Equity Research, Kotak Securities.
Global Cues
Global markets were lifted after the US announced exemptions on tariffs for smartphones, computers, and hinted at removing levies on imported vehicles and auto parts.
Japan led Asian gains, with Toyota and Honda driving a 1% rise in its indices. The S&P 500 also posted strong gains on Monday, with the Dow adding over 300 points and the Nasdaq up 0.64%.
Asian indices mostly followed suit—South Korea's Kospi rose 0.94%, Australia's ASX 200 gained 0.38%, and Taiwan's Taiex rallied nearly 2%. However, China's Shanghai Composite remained flat, down 0.07%.
Trump's Tariff Exemptions
The Trump administration has exempted smartphones, laptops, and key electronics from its steep tariffs, potentially shielding consumers from price hikes and benefiting companies like Apple and Samsung. The exclusions, announced by US Customs and Border Protection, remove these products from the 125% China tariff and the baseline 10% global tariff.
Items spared include smartphones, laptops, hard drives, and semiconductor equipment—many of which aren't made in the US. The move also benefits chipmakers like Taiwan Semiconductor, which is investing in US production.
However, the reprieve may be temporary. Trump hinted at new tariff decisions soon, including possible lower rates for China and flexibility for companies affected.
"Adding to the positive outlook, US President Donald Trump announced on Monday that he is considering exemptions on tariffs for imported vehicles and auto parts," said Jain.
Speaking aboard Air Force One, Trump said some exemptions could be made to the 10% global tariff, calling it a “floor,” though details remain unclear.
Rupee Vs Dollar
The rupee strengthened sharply against the US dollar on Tuesday, boosted by a plunge in the dollar index amid recessionary fears and geopolitical unease.
The Indian unit opened 20 paise higher at 85.85 to the dollar.
The dollar index has declined for two weeks. The dollar index, though trading 0.10% up at 99.74 as of 09:06 a.m., has slipped 4.22% in the last five sessions.
Oil
Oil prices edged up with Brent crude at $65.15 and WTI at $61.79, buoyed by tariff relief and a rebound in Chinese crude imports. However, oil remains under pressure due to concerns over global growth.
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