Indian Stock Market Opens Higher Following Delay In US-EU Tariffs

Indian Stock Market Opens Higher Following Delay in US-EU Tariffs

*Mumbai, May 5, 2025* — The Indian equity markets opened the week on a strong note, with benchmark indices posting significant gains, buoyed by robust foreign inflows and positive global sentiment after the delay of proposed US-EU tariffs. A favorable global trade environment alongside optimism surrounding a potential India-U.S. trade agreement and declines in crude oil prices provided additional support to the markets.

Key Indices Gain as Foreign Inflows Accelerate

The BSE Sensex climbed 295 points, reinforcing investor confidence, while the broader NSE Nifty 50 index hit a new high of 24,461.15, reflecting a 0.47% rise on the day. The uptick was driven by substantial foreign investment activity, which has been instrumental in bolstering the Indian equity markets over the past several sessions. Market watchers point to easing geopolitical tensions abroad, particularly with the postponement of new tariffs between the United States and the European Union, as a primary factor behind the positive momentum.

Oil & Gas Stocks Lead Rally amid Falling Crude Prices

Oil & Gas sector shares outperformed, with falling crude prices improving the outlook for major energy companies. Lower international oil prices are generally beneficial for the Indian economy, which relies heavily on energy imports, by reducing input costs for companies and potentially curbing inflationary pressures. This sectoral rally further underpinned overall market sentiment.

Optimism Over India-U.S. Trade Relations

Investors are also tracking progress in ongoing negotiations for a potential trade deal between India and the United States. Market participants remain optimistic that a closer economic relationship with the U.S. could open up new avenues for Indian exports and attract additional foreign capital to the country, especially in the manufacturing and technology sectors.

Supporting Factors: Stable Global Cues and Strong Inflows

Analysts highlighted that Monday’s gains are largely influenced by stable global equity cues following the US-EU tariff delay. The absence of immediate escalation in global trade tensions has contributed to risk-on sentiment among foreign institutional investors (FIIs), who have been increasing their exposure to Indian equities. This trend is apparent in the consistent rise in foreign portfolio investments over recent weeks.

Market Outlook Remains Cautiously Positive

While the near-term outlook remains positive, market experts caution that volatility could persist should global trade negotiations take an adverse turn or if oil prices see unexpected spikes. Nevertheless, with a pipeline of strong foreign inflows, optimism regarding trade deals, and supportive macroeconomic factors, the Indian stock market is expected to sustain its upward trajectory in the coming sessions.

Summary

In summary, the Indian stock market started the week on a strong footing, with both Sensex and Nifty rallying following a delay in US-EU tariffs, falling global crude oil prices, and encouraging signs from foreign investors. Oil & Gas stocks led the gains, supported by both domestic and international favorable cues. Investors will continue to monitor global developments and the progress of India-U.S. trade talks for further direction.