As The Fear of Trump's Tariffs Fades, Three Reasons Explain the Surge in the Stock Market

International News : The stock market experienced a significant turnaround on Tuesday, with the Sensex and Nifty indices surging after a massive one-day decline in the previous session. Here are the three key reasons behind this sudden shift:

Positive Global Signals

The Asian markets saw a robust recovery, with most indices trading in the green, except for Indonesia. This improvement was triggered by a modest rebound in US equity futures. The positive global sentiment helped boost investor confidence, which had been shaken by weak global trends.

Technical Support

Despite the sharp decline on Monday, the Nifty managed to stay above the crucial support level of 22,000. According to Kranti Bathini, Equity Strategist at WealthMills Securities, this technical support helped the market maintain its footing. The Nifty S&P BSE Sensex rose by 1,089.08 points to close at 74,227.08, while the Nifty 50 index gained 374.25 points to close at 22,535.85.

Clarity on Global Trade Tensions

Although uncertainty still lingers, investors are increasingly convinced that the trade war between the US and China will have a limited impact on other major economies. Business experts believe the trade war will likely be contained within the US and China, with other countries opting for negotiations. This development has made pharma stocks attractive to long-term investors, as the US is unlikely to impose tariffs on pharmaceuticals.

What's Next?

Despite the current surge, experts remain cautious, with investors adopting a "wait and watch" approach, awaiting further clarity on global developments, particularly regarding the trade war. The Indian economy's macroeconomic situation is stable, with an expected growth rate of around 6% in FY 2026. Long-term investors may consider investing in high-quality large-cap stocks, particularly in the financial sector.