Sensex jumps 1100 points, Nifty 50 above 22,500; why did Indian stock market skyrocket today? Explained with 5 reasons

Stock market today: After witnessing a ‘Black Monday’, the Indian stock market witnessed strong buying throughout the trading session on Tuesday. The Nifty 50 index opened on a gap-up note at 22,446 and settled the day at 22,535. The BSE Sensex also opened higher at 74,013 and ended around 1,100 points up at 74,227. Today, Bank Nifty, too, had a gap-up start as the index opened at 50,388. The frontline banking index closed at 50,511, logging an intraday gain of 650 points.

The buying was visible across the segments, as the broader market also witnessed strong action throughout Tuesday. The BSE Smallcap index finished 2.18% higher, whereas the BSE Midcap index went up by around 1.85%.

As of close, 434 stocks had touched circuits, of which 252 BSE-listed shares hit the upper circuits and the remaining 182 BSE-listed shares hit the lower circuits. Similarly, 52 BSE-listed shares hit a 52-week high, while 54 BSE-listed stocks touched a 52-week low during Tuesday's dealings.

According to stock market experts, the Indian stock market is rallying after Donald Trump's claim that countries are ready to negotiate on tariffs, which may ease trade war tensions. Short covering by traders was another reason behind the sharp upside in the Indian stock market. Strong global markets, the buzz around the RBI rate cut, and better Q4 results 2025 are some other reasons that are fueling the Indian stock market today.

Why is the Indian share market rising today?

On why the Indian stock market is rising today, Avinash Gorakshkar, Head of Research at Profitmart Securities, said, “Yesterday, the US President Donald Trump said that a good number of countries (including Vietnam) are more than eager to negotiate on tariffs, which has eased the trade war tension. However, short covering by those who had short positions can also be a reason for rising stock markets across the world. Today, the Japanese Nikkei and Hong Kong's Hang Seng opened with a big upside gap, which triggered a trend reversal in the global markets' bias.”

The Profitmart Securities expert added, “The RBI policy meeting is underway, and the market is expecting a 25 bps rate cut announcement as the Indian central bank is expected to counter the challenges on the liquidity front to contain the potential inflation threat on Trump's tariffs.”

Stock market today: Top 5 reasons for D-street rally

1] Ease in trade war tension: “The US President Donald Trump has claimed that many countries are more than eager to negotiate on tariffs imposed by the US administration on them. This means the trade war fear has eased and the reciprocal tariff has shifted towards trade negotiations,” said Avinash Gorakshkar.

2] Strong global markets: After experiencing a bloodbath on Monday, the Asian stock market opened significantly higher, as the Japanese Nikkei index gained over 5% in the early morning session. Hong Kong's Hang Seng index surged around 1.50%. At the same time, other Asian bourses also witnessed strong buying interest, which worked as a trend reversal in the global markets' bias, said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

3] Short covering after strong selling: “After Black Monday, people had huge short positions, which they are covering after the bulls' strong response to the bears. Hence, this short-covering by traders is also a reason for a relief rally on Dalal Street,” said Avinash Gorakshkar of Profitmart Securities.

4] RBI rate cut buzz: “The RBI policy meeting is underway, and the market expects at least 25 BPS rate cuts from the Indian central bank. This is triggered by buying at discounted levels on Tuesday. The market estimates that the RBI MPC would focus on the challenges coming on the liquidity and inflation front after Trump's tariff flair. So, a 25 to 50 BPS rate cut can be an option, and the RBI may exercise it in this RBI policy meeting,” said Sandeep Pandey, founder of Basav Capital.

5] Better Q4 results 2025: “After a promising Q4 business update given by most Indian banks, the market expects strong Q4 results from the banking majors. Many banks are also offering fundraising options. This means banks expect sustained business in upcoming quarters, which means demand and supply from the industries remain on an uptrend. However, listed companies are expected to opt for the higher provisioning to counter the challenges posed by Trump's tariff,” said Sandeep Pandey of Basav Capital.

Indian stock market outlook

Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, said, "The Nifty 50 index would need to stage a significant pullback to move past the 22,800 zone to restore conviction and clarity for further upward movement."

Suggesting investors to trade cautiously, Mahesh M Ojha, AVP — Research at Hensex Securities, said, “The Indian stock market bias is still volatile as the Nifty 50 index is facing a hurdle at 22,650 after making a strong base at 21,690. On breaking below 21,690 on a closing basis, the 50-stock index may try to test the 21,400 and 21,100 levels. On the upper side, the benchmark index may touch 22,800, breaking above 22,650 on a closing basis. However, trend reversal on Dalal Street can be assumed only after the breakage of the 22,800 hurdle.”

The Hensex Securities expert said that Sensex today is facing a hurdle at 74,400 and it has made a strong base at 73,200. So, bullish or bearish trend can be assumed on the breakage of either side of the range.

Stock market strategy amid Trump's tariff tantrum

Unveiling stock market strategy in the wake of the US President Donald Trump's tariffs, Motilal Oswal said, “Stay selective. Focus on large-caps and quality mid-caps with earnings visibility and strong balance sheets. Domestic demand, capex, and financial strength remain key themes for FY26.”

On preferred sectors amid trade war fear, Motilal Oswal listed out the following segments with proper assertions:

1] BFSI – Strong credit growth, benign asset quality.

2] Capital Goods – Capex momentum + policy push.

3] Telecom – ARPU-led growth, 5G monetisation.

4] Discretionary Consumption – Urban-led rebound; rural stabilising.

5] Healthcare – Margin stability, global traction.

Stocks to buy

On the top large-cap picks, Motilal Oswal suggested buying shares of ICICI Bank, Kotak Mahindra Bank, L&T, Reliance Industries, Bharti Airtel, Titan Company, and Trent.

When asked about mid-cap and small-cap stocks that one can consider, Motilal Oswal suggested buying these shares: Indian Hotels Company, JSW Infra, BSE, HDFC AMC, Dixon Tech, Coforge, ICPA Labs, Page Industries, SRF, and Suzlon Energy.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.