Indian markets recoup losses sparked by Trump tariffs; investors get richer by nearly Rs 11 lakh cr

Financials, which hold the highest weight on the indices, gained more than 2 percent. The smallcap and midcap indices also rallied 3 percent each, staging a recovery from recent underperformance.

Indian equities staged a dramatic comeback on Tuesday, wiping out all the losses since the Liberation Day. The Sensex jumped over 1,750 points and the Nifty surged past 22,300, adding a whopping Rs 10.9 lakh crore in market capitalization in a single day—one of the sharpest single-session gains in recent months.

Since the close of April 2, the Nifty has remained flat, while the Sensex edged up by 0.15 percent. During the same period, the overall market capitalisation declined by Rs 73,733.47 crore. Today’s rally was broad-based and sentiment-driven but with plenty of firepower behind the optimism.

Tariff twist lifts global mood

At the heart of the rebound was a late-breaking shift in US trade policy. Washington signalled it would delay retaliatory tariffs by 90 days for most countries except China. For Indian markets, that was enough to ease nerves. The stance against China was a trigger to keep the bulls raging in stocks benefiting from the China Plus One diversification move by global companies, although gains were seen across the board with advances outnumbering declines 7:1 on the National Stock Exchange.

All 13 major sectors on the NSE ended in the green

Financials, which hold the highest weight on the indices, gained more than 2 percent. The smallcap and midcap indices also rallied 3 percent each, staging a recovery from recent underperformance.

Domestic story is still strong

Domestic institutional investors appeared to double down on this view, stepping in aggressively on Tuesday, dealers said.

Supportive global set-up

Asian markets were also buoyant on Tuesday, helped by a weakening dollar and steady US bond yields. That added further tailwinds to risk assets, just as India’s markets reopened after an extended weekend.

Beyond geopolitics, India’s macro resilience stood out. With strong domestic demand and minimal direct exposure to US-China trade tensions, the country is increasingly being viewed as a safe bet in a choppy global environment. Although the FII flow data for the day is still awaited, some dealers said there was good buying seen today.

Reclaiming ground

With Trump's losses now made good, investors will now turn their focus to the upcoming earnings season and any further cues from global central banks. Analysts caution against assuming this is the start of an unbroken rally. Much will depend on how corporate earnings pan out, and whether global trade tensions truly ease. But for now, the market has sent a clear signal: it’s not done betting on India’s growth story.

The S&P 500 has rallied almost 9 percent from its April lows, buoyed by optimism around a potential pause in US tariff hikes. This surge reflects renewed investor confidence in global trade stability and a risk-on sentiment across developed markets.

In comparison, the Nifty 50 has risen almost 3 percent from its April lows, underperforming its US counterpart. This divergence suggests that Indian equities may still have room to catch up—especially if global cues remain supportive and domestic earnings deliver in line with expectations.