Following positive sentiments after US President Donald Trump declared a 90-day pause on India's 26% tariffs, the Indian stock market soared in the early morning session on Friday. The Nifty 50 index opened higher at 22,695 and reached an intraday high of 22,784 in early morning trade on Friday. The BSE Sensex opened higher at 74,835 and reached an intraday high of 75,145 within a few minutes of the opening bell, logging a rally of more than 1,100 points in the morning session. Similarly, Bank Nifty opened at 50,634, and the banking index reached an intraday high of 50,968, gaining 728 points within minutes of the market opening on Friday.
This rally on Dalal Street is participatory, as strong buying occurred in the broader markets as well. In the early morning session, the BSE Small-cap index rose more than 2%, while the Mid-cap index increased by more than 1.85%.
According to stock market experts, the Indian stock market rally is being driven primarily by US President Donald Trump's unexpected decision to postpone the imposition of significant reciprocal tariffs on all trading partners (excluding China) by 90 days. However, they credited the RBI's policy with the strong start on Friday. They stated that the RBI predicted 4% inflation in FY26 while announcing a 25 basis point rate cut to maintain market liquidity. They also mentioned the potential for better Q4 results in 2025.
Sugandha Sachdeva, Founder of SS WealthStreet, commented on the reasons for the Indian stock market rally, saying, "This Dalal Street rally is largely driven by US President Donald Trump's unexpected move to delay the imposition of hefty reciprocal tariffs on all trading partners (excluding China) by 90 days."
Why is the Indian stock market skyrocketing? Top Reasons
According to market experts, today's Dalal Street rally can be attributed to the following five crucial reasons: Trump's tariff pause, the RBI's repo rate cut, a positive outlook for Indian inflation, a stronger Q4FY25 results buzz, and FIIs' sell China buy India rant on Dalal Street.
Trump's tariff pause: "This rally is primarily driven by Trump's tariff pause of 90 days, excluding China. However, the most important aspect of these tariffs' implementation is an exemption for Indian exports to the United States, which fueled buying on Dalal Street during the early morning session on Friday," said Avinash Gorakshkar, Head of Research at Profitmart Securities.
Sell China, Buy India. rant: Avinash Gorakshkar of Profitmart Securities claimed that Donald Trump had excluded China from the 90-day tariff exemption. In contrast, the 26% additional tariff imposed on India has been paused. This is expected to boost FIIs''sell China, buy India' bets.
"During the COVID pandemic, the world witnessed the havoc caused by Chinese companies in Semiconductor Chip Manufacturing, and we learned that over-reliance on China can lead to disaster. Semiconductor chip manufacturing was deliberately halted to create an artificial chip shortage for automakers. As a result, the world prefers countries like India to non-democratic countries like China," said Sandeep Pandey, Founder of Basav Capital.
RBI repo rate cut: "The repo rate cut of 25 basis points announced by the Indian central bank is also playing into bulls' minds, as banks are expected to announce interest rate cuts following the outcome of the RBI's MPC meeting. The market believes that the 25 basis point rate cut and accommodative stance adopted by the RBI at its recently concluded MPC meeting will result in no liquidity shortage. "This is also contributing to today's stock market rally," said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.
According to Jain, the RBI has predicted 4% inflation in FY26, which is another reason for bulls to go all out. Despite global triggers such as President Trump's tariff-fueled economic recession fears, the Indian central bank has managed to keep inflation in check.
