Indian shares posted their biggest one-day gain in a month on Tuesday, shrugging off the China-U.S. trade war fears that weighed on global stocks and focusing instead on the chance for a trade truce with the U.S., similar to Mexico and Canada.
The Nifty 50 added 1.62% to 23,739.25, while the BSE Sensex gained 1.81% to 78,583.81, with both logging their biggest single-session gains in a month.
Asian and European stocks were hauled back by fears of a global trade war after the U.S. and China slapped retaliatory tariffs on each other, rekindling fears that were doused on Monday after U.S. President Donald Trump suspended tariffs on Mexico and Canada.
Trump has also threatened to impose 100% tariffs on the BRICS member countries, which include India, if they replaced the dollar as a reserve currency.
“The real trigger for Indian markets today was the tariff pause on Mexico and Canada, which signalled that the U.S. is ready to negotiate,” said G Chokkalingam, founder and head of research at Equinomics Research.
Compared to Mexico, Canada and China, India’s exports to the U.S. are relatively smaller and hence investors are optimistic that they may not attract Trump’s scrutiny, Chokkalingam said.
Indian shares set to track Asian peers higher as US pauses tariffs
The Nifty started February on a weak note after a mixed federal budget and the trade war fears, threatening to extend a four-month losing streak. That, however, has made stock prices relatively cheaper.
High-weight financials rose 2.11%, led by a 2.6% jump in top private lender HDFC Bank.
The small-caps and mid-caps rose 1.1% and 1.6%, respectively.
State-owned firms rose 2.7% after dropping 6.3% in the previous two sessions, led by oil marketing companies on softer crude prices and defence firms on a potential jump in orders.
Divi’s Laboratories jumped 3.6%, taking its two-session gains to 8.3% since beating quarterly profit estimates.
Asian Paints climbed 2.7% due to stronger-than-expected volume growth in the third quarter.
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