Sensex Jumps 1,100 Points, Nifty Crosses 22,700 – Here’s Why the Indian Stock Market is Rising on April 11?

The Indian stock market witnessed a significant rally on Friday as investors reacted positively to key global and domestic developments. The Nifty 50 index opened higher at 22,695 and climbed to an intraday high of 22,874, registering a gain of 475 points or 2.12%. Similarly, the BSE Sensex opened at 74,835 and surged to an intraday high of 75,319, recording an increase of over 1,400 points during the trading session. 

Bank Nifty also experienced a sharp rise, opening at 50,634 and reaching an intraday high of 51,066, gaining 826 points within minutes of the market opening. The rally was widespread, with strong buying observed in mid-cap and small-cap stocks. The BSE Small-cap index jumped over 2.10%, while the BSE Mid-cap index rose by more than 1.30%. 

By 10:30 AM, 281 stocks listed on the BSE had hit their circuit limits. Among them, 183 stocks touched the upper circuit, while 98 stocks reached the lower circuit. Additionally, 42 BSE-listed stocks climbed to their 52-week highs, while 23 stocks fell to their 52-week lows. 

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Why is the Indian Stock Market Rising Today? 

Stock market experts believe that this rally is primarily driven by US President Donald Trump’s decision to delay the imposition of reciprocal tariffs for 90 days, excluding China. However, other factors such as the Reserve Bank of India’s (RBI) policy decisions, expectations of strong Q4 earnings, and a global shift in investment sentiment also contributed to the surge. 

Below are the 5 key reasons why the Indian stock market is witnessing such a sharp rise: 

1. Trump’s Tariff Pause Boosts Market Sentiment

    

The biggest trigger for this market rally was the announcement by US President Donald Trump regarding a temporary suspension of additional tariffs. Trump decided to delay the implementation of a 26% tariff on Indian exports for 90 days, providing relief to Indian exporters and boosting investor confidence. 

This move has given Indian businesses time to prepare for potential tariff changes, reducing short-term trade uncertainties. The exemption has encouraged strong buying activity in Indian equities, as it signals a favorable global trade stance towards India. 

2. Foreign Investors Shift Focus from China to India

    

Another crucial factor fueling this rally is the growing sentiment among foreign institutional investors (FIIs) to shift investments from China to India. This “Sell China, Buy India” trend has gained traction due to concerns over China’s economic policies and geopolitical risks. 

Experts recall how the COVID-19 pandemic exposed the risks of over-reliance on Chinese manufacturing, particularly in the semiconductor sector. During the crisis, China was accused of creating artificial shortages of semiconductor chips by deliberately halting production, causing disruptions in global supply chains. Investors are now more comfortable diversifying into markets like India, which offers a stable and democratic environment for long-term investments. 

3. RBI’s Repo Rate Cut and Inflation Outlook

    

The Reserve Bank of India (RBI) recently announced a 25 basis point (bps) cut in the repo rate, which has played a crucial role in boosting market confidence. Lower interest rates improve liquidity in the financial system and encourage borrowing, which, in turn, supports economic growth. 

Investors view this rate cut as a positive signal, as it suggests that the central bank is maintaining an accommodative stance to support growth. 

Furthermore, the RBI’s projection of 4% inflation for FY26 has reinforced confidence among market participants. This outlook indicates that inflation remains under control, allowing the central bank to focus on economic expansion without aggressive monetary tightening. Investors are optimistic that lower interest rates will boost corporate profitability, particularly for sectors such as banking, real estate, and consumer goods. 

4. Short-covering by Bears

    

Another reason behind the sharp market surge is short-covering by traders who had bet against the market earlier in the week. 

The Indian stock market had closed lower on Wednesday, and many traders had taken short positions, expecting further declines. However, with strong buying momentum seen in global markets on Thursday, these traders were forced to buy back stocks to cover their short positions when the market opened on Friday. 

5. Optimism Over Q4FY25 Earnings

    

The market is also riding high on expectations of strong corporate earnings for Q4FY25. Analysts predict that the RBI’s interest rate cut will benefit banks and financial institutions, which could report improved profitability in the upcoming results. 

The tariff pause announced by Trump has provided relief to Indian exporters, allowing them to postpone additional cost provisions for another quarter. This development is expected to improve the financial performance of export-driven companies, further strengthening investor sentiment. 

Additionally, the banking sector is likely to benefit from increased lending activity following the rate cut, leading to better-than-expected earnings. Investors are closely watching corporate earnings reports, as strong results could provide further upward momentum for the market. 

Stock Market Outlook – What Should Investors Do? 

Despite the strong rally, market experts advise investors to remain cautious as volatility could increase in the coming days. 

Given the uncertainties surrounding global trade policies, investors should closely monitor developments related to US tariffs and global market trends.  

Conclusion 

The Indian stock market’s sharp rise can be attributed to a combination of global and domestic factors, including Trump’s tariff pause, the RBI’s rate cut, shifting FII sentiment, short-covering by bears, and expectations of strong Q4 earnings. Investors are advised to stay informed and adopt a balanced approach while navigating market volatility. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.   

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.