Trump’s 50% tariff has left the Indian stock market devastated. The Sensex crashed up 3% and investors lost nearly 14 lakh crore. It is the biggest single-day fall in 10 months, which ended with a solid loss of 2,227 points. The tariffs on imports from China, Canada, and other countries also affected India. However, it’s the stock market and rise and fall is somehow common. To clarify, Donald Trump has claimed that countries are ready to negotiate the tariff, which has eased the trade war tension.
According to sources, the annual letter to shareholders written by Donald Trump suggested the U.S. develop closer trade ties with countries like India instead of asking them to align themselves with the U.S. As the country lacks trade agreements with some of its closest allies, he said that Washington could bring non-aligned nations like India closer by extending a friendly hand. Such statements clear the fog for the Indian stock market.
Let’s dive deeper into other aspects for sudden growth in the Indian stock market
1. Rebound in Global Markets
As soon as Trump declared how the countries are ready to make negotiations on the tariffs, it has eased the trade war tension. Thus, the trade war tension has eased and shifted towards negotiations. Here, global market sentiments have also played a vital role. Because optimism of investors and traders has led to progress in geopolitical dialogues that has uplifted investor sentiment worldwide.
2. Strong Domestic Economic Indicators
The macroeconomic fundamentals of India have continued to show resilience. Regardless of global uncertainties, domestic growth of the country remains intact. In addition, inflation has moderated within the RBI’s comfort range, with retail inflation hovering around 4.8% in March 2025. A stable inflationary environment adds to the market’s appeal, particularly for long-term investors.
3. Declining U.S. Treasury Yields
It is another effective macroeconomic factor influencing the Indian markets. The drop in the U.S. Treasury yields have reduced the attractiveness of U.S. bonds, pushing global investors towards higher-yielding assets in emerging markets like India. The reduction of funds has resulted in greater capital inflows into Indian equities. Thus,
4. The Drop of Crude Oil Prices
Trading of unrefined petroleum, a global commodity, primarily through futures contracts and options. The prices of crude oil rallied more than 1%, helping them rebound after a hefty selloff in recent sessions. The drop in crude oil prices has attracted investors to the stock market of India, which has contributed to the growth in the stock market.
5. Hopes of Monetary Easing by the RBI
There is growing optimism in the Reserve Bank of India (RBI) to adopt a dovish stance in the upcoming policy meeting. As the stock market is run by sentiments, investors are already keeping high faith in the measures taken to support liquidity in the financial system, and analysts expect further rate cuts to spur demand and revive consumption. The anticipation of lower interest rates has created notable changes in the Indian stock market.
6. Sectoral Growth and Government Spending
The government of India focuses on capital expenditure that has also been a major growth engine for the stock market. The union budget for 2025-26 has also allocated significant resources to railways, infrastructure, defense, and renewable energy. This, in turn, has buoyed related sectors on the stock exchange.
To Sum Up
There is always a chance of seeing a rainbow after a storm. The recent surge of the Indian stock market is not driven by a single factor but rather by a confluence of domestic and global tailwinds. Regardless of Trump’s tariffs, the word negotiation has somehow benefited the stock market of the country. The global investor sentiment has also played a vital role in managing the stock market of the country. Though there is no guarantee when it comes to the stock market, the long-term growth trajectory remains firmly intact.
While the outlook remains broadly optimistic, experts advise caution and a diversified investment approach. Volatility may return, especially with global events and upcoming elections on the horizon. Nevertheless, India’s long-term growth trajectory remains firmly intact, making it one of the most promising markets in the global landscape today.
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