Mumbai | May 26, 2025 —
India’s benchmark equity index, the BSE Sensex, rallied sharply on Monday morning, surging more than 700 points after former U.S. President Donald Trump postponed a proposed tariff hike on European Union goods. The delay in trade restrictions sparked optimism in global markets, with investors welcoming the move as a step toward easing international trade tensions.
At 10:30 AM IST, the Sensex climbed to 75,220, registering a gain of over 700 points. The NSE Nifty also advanced, rising by more than 200 points to trade above 22,860. This marked a significant rebound in investor sentiment following a week of cautious trading.
Key Sectors Drive Gains
Major Indian companies in the financial, IT, and auto sectors led the charge. Stocks of HDFC Bank, ICICI Bank, Infosys, and Mahindra & Mahindra posted substantial gains, buoyed by strong institutional buying and improved global cues. Broader markets also gained momentum, with mid-cap and small-cap indices trading over 1% higher.
Market analysts attributed the surge to both the delay in tariffs and resilient domestic economic indicators. “Trump’s decision to hold off on EU tariffs has calmed market nerves and boosted risk appetite globally. Coupled with India’s stable economic outlook, this creates a supportive environment for equities,” said Arvind Khanna, a senior market analyst at Truestock Advisory.
Improved Global Cues and FII Inflows
Asian markets reflected a similar upbeat sentiment, with key indices in Japan, South Korea, and Hong Kong trading higher. The Indian rupee also strengthened marginally against the U.S. dollar, driven by renewed foreign institutional investor (FII) interest and declining crude oil prices.
The deferral of EU tariffs is being viewed as a potential turning point in global trade dynamics, especially as Trump continues to dominate the Republican primary campaign in the U.S. His stance on international trade has previously sparked volatility, making this temporary reprieve significant for markets worldwide.
Domestic Fundamentals Remain Strong
Apart from global influences, India’s robust corporate earnings, controlled inflation, and a consistent monetary policy stance from the Reserve Bank of India are reinforcing investor confidence. Mutual fund inflows and active retail participation are also playing a crucial role in maintaining market momentum.
“The combination of positive international developments and strong domestic fundamentals suggests that the current rally has room to sustain, though investors should remain cautious of sudden global shocks,” said Neha Sinha, equity strategist at MeraCapital.
Looking Ahead
As trading continues this week, market participants will closely monitor updates on U.S. trade policy, upcoming economic data, and any statements from central banks. The response to Trump’s next moves on international trade will remain a key driver for equity trends.
In summary, the Sensex’s strong performance today underscores the importance of global political signals in shaping domestic market trends. For Indian investors, the immediate outlook appears positive, though vigilance remains essential in a highly interconnected global economy.
