The stock market had a strong run last week, even though it saw just three trading sessions. The previous week had just three trading sessions as the markets were closed on Monday, April 14 in observance of Dr BR Ambedkar’s birth anniversary, and on Friday, April 18 on the occasion of Good Friday.
The cumulative market capitalisation of all the firms listed on the Bombay Stock Exchange (BSE) jumped by nearly Rs 18 lakh crore to Rs 420.34 lakh crore, during the holiday-shortened week. Of this, the top 10 companies by market capitalisation contributed around Rs 3.86 lakh crore.
Trump’s 90-Day Tariff Pause Effect
Vinod Nair, head of research at Geojit Investments attributed this "strong resurgence" to US President Donald Trump's announcement of the 90-day pause in reciprocal tariffs.
Earlier on April 2, 2025, Trump had announced tariffs in the range of 10-50 per cent on imports from about 90 countries.
On China, he had imposed 104 per cent tariffs, which he later increased to 145 per cent and then to 245 per cent in response to China's retaliatory tariffs on US goods.
Ajit Mishra – senior vice-president, research, Religare Broking, said that the rally was mainly driven by optimism around the delay in tariffs and the recent exemptions on certain products.
This has raised hopes for potential negotiations that could mitigate the impact on global trade, he added.
Good Monsoon Expectations Boost Investors Confidence
Nair added that continued foreign investments and the expectation of an above-normal monsoon season also contributed to the rally, making the domestic market outperform other emerging markets.
Mishra added that as the week progressed, investors reacted positively to several favorable developments, including expectations of a normal monsoon, easing retail inflation—which raised the possibility of policy rate cuts—and the absence of major negative surprises from global markets.
Bank Stocks Lead Rally
Nair also mentioned that the Nifty Bank index led this sharp rebound, as it was supported by a favorable monetary environment and reductions in deposit rates by major banks. These developments are expected to improve profit margins of banks and benefit their stocks.
The Nifty Bank index climbed 6.45 per cent during the week, adding 3,287.85 points to close at 54,290.20. The index reclaimed this level for the first time since the domestic market started its correction phase.
It had touched its all-time high of 54,467.35 on September 26, 2024. Post that, the index witnessed severe correction of 12.40 per cent, to hit a recent low of 47,705 on March 11, 2025. However, it has now recovered all the losses and is currently just 175 odd points shy of its record high.
