The domestic equity market wrapped up the day on a high, riding a wave of optimism from global markets after U.S. President Donald Trump announced import tariff exemptions on electronic goods. The Nifty sailed past the 23,300 mark, supported by broad-based buying across realty, auto, and metal sectors.

Trump's move to ease tariffs on phones, computers, and other electronics'alongside a potential exemption on auto imports'helped sustain early momentum. This follows his earlier imposition of steep tariffs on all U.S. imports, which were later paused for 90 days for select countries, excluding China.

Back home, sentiment got an additional lift from the India Meteorological Department (IMD), which predicted above-normal monsoon rainfall this year'expected at 105% of the long-period average, with a 5% margin of error. The southwest monsoon typically hits Kerala around June 1 and retreats by mid-September.

The S&P BSE Sensex surged 1,577.63 points or 2.16% to 76,734.89. The Nifty 50 index rallied 500 points or 2.19% to 23,328.55.

Larsen & Toubro (+4.50%), HDFC Bank (+3.23%), and ICICI Bank (+2.86%) led the charge, giving major tailwinds to the benchmarks.

But the real stars of the day were the broader markets. The S&P BSE Mid-Cap index surged 3.02%, while the Small-Cap index outperformed with a stellar 3.21% gain.

Market breadth was decisively positive'out of the stocks traded on the BSE, 3,302 advanced, 785 declined, and 170 remained unchanged.

Meanwhile, volatility took a backseat. The India VIX, the market's fear gauge, nosedived 19.80% to 16.13, signaling cooling nerves and rising investor confidence.

Economy:

India's wholesale inflation, based on the Wholesale Price Index, eased to 2.05% in March as compared with 2.38% in February. It had stood at 0.26% in March 2024. 'Positive rate of inflation in March, 2025 is primarily due to increase in prices of manufacture of food products, other manufacturing, food articles, electricity, manufacture of textiles, etc., the industry ministry said in a statement.

India recorded a trade deficit of $21.54 billion in March of 2025, widening from the $15.6 billion gap in the corresponding period of the previous year. Imports surged by 11.4% annually to $63.51 billion, the highest ever for the month, despite the relatively low price of fuel that makes up a large portion of India's foreign purchases. In the meantime, exports rose by a much-softer 0.7% to $41.97 billion.

India's retail inflation, based on the Consumer Price Index (CPI), fell to 3.34% in March 2025, to mark a fifth consecutive slowdown to the lowest inflation rate since August 2019. The CPI inflation had stood at 3.61% in February 2025 and 4.38% in March 2024.

The inflation is below the Reserve Bank of India's 4% target midpoint. A major driver of the decline was softening food inflation, which dropped to 2.69% from 3.75% in February. This came amid deflationary trends in categories such as eggs, spices, vegetables, and pulses, which together make up nearly half of India's price basket.

Numbers to Track:

The yield on India's 10-year benchmark federal paper advanced 1.15% to 6.518, compared with the previous close of 6.440.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 85.8075, compared with its close of 86.1000 during the previous trading session.

MCX Gold futures for the 5 June 2025 settlement rose 0.04% to Rs 93,286.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.08% to 99.62.

The United States 10-year bond yield rose 0.57% to 4.389.

In the commodities market, Brent crude for June 2025 settlement fell 35 cents or 0.54% to $64.53 a barrel.

Global Markets:

European markets advanced on Tuesday amid tentative optimism that there will be some respite from U.S. President Donald Trump's tariff regime.

The U.K. employment rate ticked 0.2% points higher on the quarter to 75.1% between December 2024 and February 2025, the Office for National Statistics said in a labor market report published Tuesday. In an initial estimate, the number of payrolled employees fell 0.3% month on month and 0.2% annually in March.

Average annual wage growth excluding bonuses came in at 5.9% in December to February, up from a rate of 5.8% in November to January. Wage growth, including bonuses, was 5.6%.

Asian shares ended higher after U.S. President Donald Trump announced a temporary exemption for smartphones and other electronics from the list of Chinese imports facing steep tariffs. However, investor sentiment remained cautious, as the ongoing trade negotiations between Washington and Beijing continue to generate economic uncertainty.

On Monday, Trump suggested the possibility of extending tariff exemptions to automobiles as well. Nevertheless, the frequent shifts in the administration's trade stance have created uncertainty around U.S. economic policy, which has dampened investor risk appetite.

U.S. equities recorded two consecutive sessions of gains, supported by the partial tariff relief and renewed bargain buying following weeks of losses. The S&P 500 rose 0.8%, the NASDAQ Composite added 0.6%, and the Dow Jones Industrial Average also advanced 0.8%.

Despite the short-term relief, recent comments from the President indicated that the exemptions for electronics may be temporary. Trump hinted at the potential introduction of separate tariffs targeting the electronics sector, contributing to increased uncertainty about the U.S. economic outlook. The dollar declined to a three-year low amid the lack of policy clarity, and U.S. Treasury yields climbed as investors reduced exposure to government bonds.

Markets also remained wary of the broader implications of the escalating trade conflict. Last week, the U.S. imposed cumulative tariffs of 145% on Chinese imports, prompting retaliatory measures from Beijing, which introduced tariffs amounting to 125% on U.S. goods.

In addition to trade developments, U.S. markets found some support from stronger-than-expected first-quarter earnings from major banks. These results suggested a degree of resilience in corporate performance despite growing macroeconomic headwinds.

Stocks in Spotlight:

ICICI Bank added 2.86% after the bank said that its board is scheduled to meet on 19 April 2025, to consider raising funds on a private placement basis.

Vedanta surged 4.08% after Assam's Chief Minister Himanta Biswa Sarma met with the company to strategize the implementation of their Rs 50,000 crore investment plan in the state. In February, Vedanta Group Chairman Anil Agarwal announced that the firm would pump in Rs 50,000 crore in Assam and Tripura's oil and gas sector over the next 3-4 years. Agarwal announced this while speaking at the Advantage Assam 2.0 summit in February.

G M Breweries rose 1.83%. The company reported a 30.22% drop in net profit to Rs 60.46 crore in Q4 FY25 as against Rs 86.64 crore posted in Q4 FY24. However, revenue from operations (excluding excise duty) grew by 5.93% year on year to Rs 169.33 crore in the quarter ended 31 March 2025.

Macrotech Developers surged 8.25%. The Lodha brothers ' elder brother, Abhishek Lodha and younger brother, Abhinandan Lodha ' and the companies led by them, have amicably resolved all outstanding disputes under the guidance of their parents. The agreement was reached with the assistance of Justice R.V. Raveendran (Retd.) in the mediation process.

Aditya Birla Real Estate rallied 3.75% after the company's wholly owned subsidiary, Birla Estates Private clocked its highest-ever booking value of Rs 8,000 crore for FY25 compared with Rs 3,985 crore in FY24.

Poonawalla Fincorp added 4.40% after the company has launched gold loan business, aiming to expand its portfolio of secured lending products.

Aurobindo Pharma jumped 4.86% after the pharma company said that it has received final approval from US Food and Drug Administration (USFDA) to manufacture and market Rivaroxaban Tablets USP, 2.5 mg.

Biocon rose 3.84% after the company's subsidiary, Biocon Biologics, signed a settlement and license agreement with Regeneron, paving the way to commercialize Yesafili, a biosimilar to EYLEA, in the U.S. by the second half of 2026.

Jubilant Agri and Consumer Products (JACPL) surged 16.6% after the company has incorporated a wholly owned subsidiary, (WOS) Jubilant Agri Solutions (JASL), on 7 April 2025.

Quality Power Electrical Equipments jumped 6.20% after the company said that it has secured a significant order for the supply of reactors for power transmission, specifically for Flexible AC Transmission Systems (FACTS) applications.

Capacite Infraprojects added 2.66% after the company received a letter of intent from TenX Realty, a wholly owned subsidiary of Raymond, for civil and core construction works at its Bandra project.

Advait Energy Transitions advanced 6.03% after the company announced that it has been confirmed as the L1 (lowest bidder) successful bidder for a power supply project in Gujarat.

Mercury EV-Tech gained 10% after the company announced that its subsidiary PowerMetz Energy has commissioned a 3.2 GW lithium-ion battery manufacturing facility at its Vadodara campus.

Mach Conferences and Events surged 10.68% after the company announced the launch of a premium Do Dham and Char Dham Yatra by helicopter.

Kaushalya Logistics jumped 4.9% after the company announced the commencement of operations at the Katihar Depot (Bihar) for Ambuja Cements, a part of the Adani Group. The engagement is under the Carry and Forward Agent (CCFA) model.

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