Markets soar as investors cheer ceasefire, US-China trade easing

Bengaluru: The bulls came roaring back to Dalal Street on Monday, with benchmark indices BSE Sensex and NSE Nifty posting their single-biggest day rise in absolute terms, and best day in four years in percentage terms. Both the benchmarks closed the day nearly 4% up, more than wiping off the losses of 1.5% in the previous week, when Indo-Pak hostilities had erupted.

The trigger for the enthusiasm among investors were the ceasefire between India and Pakistan, as well as the The United States and China agreeing to dramatically cut back on the tit-for-tat tariffs announced earlier, for 90 days.

After opening on a high note, the 30-share Sensex soared by 2,975.43 points or 3.74% to settle at a more than seven-month high of 82,429.90. During the day, it rallied 3,041.5 points or 3.82% to a high of 82,495.97. Investors on the Sensex became richer by Rs 16.15 lakh crore.

The 50-issue Nifty rose 916.70 points or 3.82% to close at 24,924.70. In intra-day trade, it jumped 3.90% to 24,944.80.

NEW DELHI: NSE NIFTY. PTI GRAPHICS.(PTI05_12_2025_001010002B)

"Confluence of positive geopolitical and economic developments—the ceasefire between India and Pakistan, coupled with a breakthrough trade agreement between the US and China—sparked the strongest daily market rally in recent times,” said Vinod Nair, Head of Research, Geojit Investments Limited.

The US and China on Sunday (Monday India time) announced suspension of high tariffs for 90 days. After their talks in Geneva, the US agreed to cut tariffs on Chinese goods to 30% from 145% while China announced to lower its tariffs on US goods to 10% from 125%.

Nair said that sudden easing of the US-China tariff war unlocked multiple investment avenues for investors.  Sustained foreign institutional investor (FII) inflows, along with a resurgence in retail participation fuelled by expectations of a swift improvement in business sentiment, propelled Monday's upside, he added.

“The de-escalation helped equities rebound strongly after days of uncertainty. In the short term, upcoming developments of the India-Pakistan conflict would draw market participants' attention. These fluctuations and volatility are inherent aspects of financial markets and will continue to persist as investors navigate evolving economic and geopolitical developments,” said Palka Arora Chopra, Director, Master Capital Services Ltd.

Among the Sensex firms, Infosys jumped 7.91%. HCL Tech, Tata Steel, Eternal, Tech Mahindra, Tata Consultancy Services, Axis Bank, ICICI Bank, NTPC, Reliance Industries and Bajaj Finance were the other major gainers.

Sun Pharma and IndusInd Bank were the only laggards from the pack. The broader markets also mirrored this strength, with the BSE smallcap gauge surging 4.18% and midcap index jumped 3.85%.

Meanwhile, stock markets in Pakistan rallied following the understanding between the countries. Benchmark KSE-100 index jumped more than 9% on Monday. Among other Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng settled higher.