Stock market: Sensex, Nifty up 2% each; investor kitty swells by Rs 8 lakh crore

Benchmark stock indices Sensex and Nifty climbed 2 per cent each in Tuesday's trade, as positive global developments swelled investor wealth by Rs 8 lakh crore within minutes. Softening its stance on China, the US on Friday exempted phones, computers and other electronic products from reciprocal tariffs, which led to a rally in stock markets globally on Monday. Since Monday was a public holiday in India, domestic markets are catching up to global cues. 

“Dalal Street witnessed a strong rebound today, with the Nifty 50 crossing 23,300 and the Sensex rallying over 1,600 points, driven by global optimism, sharp short-covering, and easing volatility — as reflected in the 17 per cent drop in India VIX," said Vinit Bolinjkar, Head of Research, Ventura

"Markets are buzzing with expectations of backchannel trade talks following Trump’s 90-day tariff pause, interpreted more as a breather for the US than real relief for its trade partners. Weakness in the US dollar — now below 100 on the DXY — and outflows from US assets could drive FIIs back into Indian equities. Adding to the optimism, RBI’s stable inflation projections and a balanced policy stance have reassured domestic investors,"  Bolinjkar said.

The BSE Sensex was trading at 76,732.73, up 1,575.47 points or 2.10 per cent. Tata Motors climbed 5 per cent to Rs 625 and was the top Sensex gainer. It was followed by Larsen & Toubro, HDFC Bank, Mahindra & Mahindra, Adani Ports and ICICI Bank, which gained over 2.5 per cent each. Bajaj Finance, Eternal (Zomato) and IndusInd Bank also advanced 2 per cent each.

The NSE Nifty stood at 23,294.20, up 465.65 points or 2.04 per cent. Fear gauge India VIX fell 13.75 per cent to 17.34, suggesting ease in volatility in the market over the next 30 days.

The investor kitty, as suggested by BSE m-cap, swelled Rs 7.98 lakh crore to Rs 4,09,53,659.93 crore from Rs 4,01,55,574.05 crore last week.

"Considering the breadth of the market, we believe it has likely experienced its worst phase for at least the medium term. The strategy should focus on buying on dips around support levels," said Shrikant Chouhan, Head Equity Research at Kotak Securities.

The tariff exemption on a few Chinese products is seen positive by the market participants. This is especially after Nomura reported that the US import bookings from China nosedived 64 per cent from 24-31 March to 1-8 April, when President Trump announced the “reciprocal” tariffs for most of the US’s trading partners.  It cited article from SCMP on April 9, suggesting one listed Chinese export company saw its US-bound container volume plummeting from 40-50 containers per day to 3-6 due to the new US tariff.

Going into this week "Corporate earnings will occupy most of the focus of the Indian market participants while global tariff related developments will continue to garner limelight. US retail sales and industrial production data for the March month coupled with weekly jobless claims are some of the key data releases in US next week," said SBI Securities in a weekly note.