The Indian equity markets staged a dramatic comeback in afternoon trade on Wednesday, following remarks by US President Donald Trump that India had offered to reduce tariffs on US goods, easing trade tensions between the two countries.The benchmark BSE Sensex surged as much as 1,908 points from its intraday low, while the NSE Nifty50 index reclaimed the crucial psychological level of 25,000. The Nifty50 touched an intraday high of 25,080, marking its highest level since October 16. This sharp rebound was powered by gains in key index constituents including HDFC Bank, Reliance Industries, ICICI Bank, and Tata Motors — all of which posted notable upticks.
In the broader markets, the Nifty MidCap index and the Nifty SmallCap index were trading higher throughout the day. All sectors on BSE advanced, with BSE Auto rising over 2 per cent. Market watchers say that breaching the 25,000 mark on the Nifty is significant, symbolically and technically, as it sets the tone for further bullish sentiment in the near term. Trump has floated this idea before, however, the Government of India has not made any comments on Trump's remarks. India’s trade minister is expected to meet Trump administration officials from May 17-20 for further negotiations, according to the report. If it’s true that India has offered zero import duty for US goods, it’s a very positive move for the Indian economy and markets," said Chokkalingam G, founder of Equinomics Research.
"Even if the US doesn’t reciprocate, maintaining the status quo on duties would be a win, as it removes the fear of higher tariffs on Indian exports. Plus, India remains cost-competitive in low-end products where the US isn’t. The kind of US goods that would come in—like high-end motorbikes or premium liquor—won’t threaten local businesses or overwhelm the domestic market."This comes as a relief, as tensions escalated after India, earlier this week, proposed to impose retaliatory duties under the WTO (World Trade Organisation) norms against the US over American tariffs on steel and aluminium. Earlier in April, India had sought consultations with the US under the WTO's safeguard agreement, following American authorities' decision to impose these tariffs.