Sensex jumps 1300 points, Nifty above 22,800; why did Indian stock market skyrocket today? EXPLAINED with five reasons

Stock market today: Following positive sentiments after US President Donald Trump declared a 90-day pause on 26% tariffs imposed on India, the Indian stock market skyrocketed on Friday. The Nifty 50 index opened upside at 22,695 and closed at 22,828, recording an intraday rise of 429 points. The BSE Sensex opened upside at 74,835 and closed at 75,157, logging an intraday 1310-point rally during the intraday trading session on Friday. Likewise, Bank Nifty today had a gap-up opening at 50,634, and the banking index closed at 50,995, logging over 750 points gain during Friday dealings.

This rally on Dalal Street was participatory, as strong buying also took place in the broad markets. On Friday, the BSE Small-cap index surged around 3%, while the Mid-cap index skyrocketed around 1.80%.

After the market close, 473 BSE-listed stocks had touched the circuit, out of which 331 BSE-listed shares had touched the upper circuit, and 142 BSE-listed stocks had hit the lower circuit on Friday. Likewise, 65 BSE-listed stocks had climbed to 52-week highs, while 38 BSE-listed shares had hit 52-week lows.

Why is Indian stock market rising today?

According to stock market experts, this Indian stock market rally is largely driven by US President Donald Trump’s unexpected move to delay the imposition of hefty reciprocal tariffs on all trading partners (excluding China) by 90 days. However, they also credited RBI's policy for such a robust opening on Friday. They said that RBI has predicted 4% inflation in FY26 while declaring a 25 bps rate cut to maintain liquidity in the market. They also pointed towards the buzz for better Q4 results 2025.

Speaking on the reasons for the Indian stock market rally, Sugandha Sachdeva, Founder of SS WealthStreet, said, “This Dalal Street rally is largely driven by the US President Donald Trump’s unexpected move to delay the imposition of hefty reciprocal tariffs on all trading partners (excluding China) by 90 days.”

Why is the Indian share market skyrocketing? Top 5 reasons

The market experts said that today's Dalal Street rally can be attributed to these five crucial reasons: Trump's tariff pause, RBI's repo rate cut, positive outlook for Indian inflation, a better Q4FY25 results buzz, and sell China buy India rant among FIIs on Dalal Street.

1] Trump's tariff pause: “This rally is mainly driven by Trump's tariffs pause for 90 days, excluding China. However, the important part in this tariffs' pa use is an exemption for the Indian export to the US, which has fueled buying on Dalal Street during the early morning session on Friday,” said Avinash Gorakshkar, Head of Research at Profitmart Securities.

Gorakshkar said the Indian External Affairs Minister recently claimed about the trade negotiations going on with the US administration. He expected a breakthrough in clinching a deal with the US administration on Trump's tariff very soon. If this happens, more clarity will come on Trump's tariff.

“The market is expecting a breakthrough in Indo-US trade negotiations within the 90-day tariffs pause,” said Gorakshkar.

2] Sell China Buy India rant: Avinash Gorakshkar of Profitmart Securities said that Donald Trump has excluded China in 90 days tariff exemption. In contrast, the 26% additional tariff levied on India has been paused. This is expected to fuel ‘sell China buy India’ bets among the FIIs.

“During the COVID pandemic, the world did see the havoc created by Chinese companies on Semiconductor Chip Manufacturing, and we came to know that over-dependency on China can lead to disaster. The semiconductor chip manufacturing was deliberately halted to create an artificial chip shortage for the auto companies. Hence, the world is more comfortable with countries like India than a non-democratic country like China,” said Sandeep Pandey, Founder of Basav Capital. 

3] RBI repo rate cut: “The repo rate cut by 25 bps announced by the Indian central bank is also playing into the minds of bulls as banks are expected to announce interest rate cuts after this RBI's MPC meeting outcome. The market estimates that the 25 bps rate cut and the accommodative stance adopted by the RBI in its recently concluded MPC meeting mean no liquidity shortage. This is also playing its role in today's stock market rally, ” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

Jain said that RBI has predicted 4% inflation in FY26, which is also a reason for bulls to come out at full strength. The Indian central bank has managed to keep inflation under check despite global triggers like Trump's tariff-fueled economic recession fear.

4] Short-covering by bears: “On Wednesday, the Indian stock market had ended lower and most of the global market's indices had experienced strong buying on Thursday. As a good number of short positions were left on Wednesday, bears immediately covered their short positions when the NSE and BSE opened today after the stock market holiday on Thursday. This is also a reason for the sharp rise of the Indian indices,” said Avinash Gorakshkar of Profitmart Securities.

5] Buzz for better Q4 results 2025: “After 25 bps rate cut by RBI, the market expects strong Q4 earnings from the banking sector, which signals sustained industrial demand. So, Dalal Street is expecting better Q4 results 2025 for the Indian stock market,” said Sandeep Pandey of Basav Capital.

The Basav Capital expert said that the 90-day tariff pause has allowed Indian companies to have sigh relief from the provisioning as they can extend the provisioning for 90 days or, say, one quarter in the wake of Trump's tariff pause. Now, they have three months to prepare for the higher tariff regime by developing a proper roadmap for this global trigger.

Stock market outlook

On the suggestion to investors amid the skyrocketing Indian stock market, Sugandha Sachdeva of SS WealthStreet said, “The upside momentum is likely to face resistance in the 22,900 to 23,100 zone, limiting further gains. Investors should remain cautious as the evolving global trade landscape injects uncertainty into the markets.”

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.