India outpaces global peers, only market to post gains since US tariff-induced lows

Falling crude oil prices have provided an additional boost by lowering inflationary pressure and improving the trade deficit.

India has emerged as the only major equity market to post gains since US President Donald Trump’s April 2 tariff announcement, with the Sensex and Nifty rising 2.5 percent and 2.2 percent, respectively, in local currency terms. In US dollar terms, both indices are up over 2 percent, even as global peers remain deep in the red, Bloomberg data showed.

This week alone, the Nifty has jumped over 4 percent and about 6.5 percent in the last five sessions—the strongest five-day performance when compared with the likes of Shanghai Composite and Japan’s Nikkei, which have risen 2 percent and 1.3 percent, respectively, while the S&P 500 has declined 1.4 percent.

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In fact, among 16 key markets tracked globally, India is the only large economy where stocks have not only erased their post-April 2 losses but advanced beyond pre-announcement levels.

Global equities have been under pressure since the US announced fresh tariffs. The S&P 500 and Dow Jones have dropped 7 percent and 6 percent, respectively, over this period. Losses in Europe have been equally sharp, with France’s CAC down 7.5 percent, Germany’s DAX off 5.4 percent, and the FTSE 100 lower by 3.9 percent.

Among Asian markets, China’s CSI 300 is down 3.9 percent, the Hang Seng has lost 7.8 percent, and Taiwan’s stock exchange has declined 8.4 percent. Japan’s Nikkei has slipped 3.8 percent in local terms, while South Korea’s Kospi has fallen 1.4 percent. Other regional indices such as Jakarta (-1.7 percent), the Philippines (-1.8 percent), and New Zealand’s NZX 50 (-2.1 percent) have also seen negative returns. Brazil’s Ibovespa is down 2.2 percent.

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"A major factor supporting sentiment is the market’s growing anticipation of a bilateral trade agreement between the US and India. India never went down the road of confrontation. No reciprocal tariffs, no public criticism," said Hiren Ved, Director and CIO of Alchemy Capital Management. "Instead, India has been ahead in talks and could be among the first nations with which the US signs a trade pact."

India has also taken steps to ease trade tensions—reducing tariffs on certain US exports such as high-end motorcycles (cut from 50 percent to 30 percent), bourbon whiskey (150 percent to 100 percent), and telecom equipment (20 percent to 10 percent).

Falling crude oil prices have provided an additional boost by lowering inflationary pressure and improving the trade deficit. Back home, early estimates for corporate earnings have added to optimism, with analysts expecting 2–3 percent growth in the June quarter.

Furthermore, India’s relative outperformance comes amid expectations that it could withstand the tariff conflict given its domestic consumption-led growth model. India, being a consumption-led economy, is likely to be among the least affected by the ongoing tariff disputes.

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