Indian equities rallied over 2% this morning – following its Asian peers – as US President Donald Trump hinted at relief from steep tariffs in the automobile sector. Sensex, the 30-pack index of the Bombay Stock Exchange opened over 1,500 points higher while Nifty regained the 23,000 level, boosted by a surge in automobile stocks. Experts, however, suggest volatility would continue across global markets.
Rupee, meanwhile, jumped 39 paise to 85.71 against the US dollar as currency markets opened this morning, with forex traders suggesting a weak US currency index has strengthened the rupee despite the foreign capital outflow.
Trump had imposed a flat 25% tariffs on auto imports earlier this month. But he signalled yesterday he was “very flexible” with the trade policies and that he was “looking at something to help some of the car companies”. Investors cheered Trump’s remarks with heavy buying across markets, though cautious in view of the US President’s unorthodox trade approaches.
The steady rise in global equities follows a week of a rollercoaster ride that left investors poorer by trillions of dollars.
Trump’s possible compromise over auto tariffs provided a breather to Asian equities too. Tokyo and Seoul markets rallied with Japanese automakers Toyota, Mazda, and Nissan posting huge gains. Trump’s new taxes on the import of technological and pharmaceutical products, however, sustained the uncertainty in equity markets, dampening the impact of an auto surge.