Indian shares followed their Asian peers higher on Wednesday after Washington delayed tariffs on some Chinese imports, bringing some relief to global markets rattled by a bruising trade conflict.
The broader NSE Nifty rose 0.36% to 10,964.20 as of 0439 GMT, while the benchmark BSE Sensex gained 0.37% to 37,095.80.
U.S. President Donald Trump delayed his September 1 deadline for 10% tariffs on some Chinese imports, delaying duties on a range of consumer goods and sending Wall Street stocks soaring on Tuesday.
The trade conflict has disrupted global supply chains and slowed economic growth, dampening sentiment across markets.
The Nifty metal index gained 1%, led by a 4% increase in manufacturer Tata Steel Ltd, which rose in tandem with commodity prices and was the top gainer on the NSE Nifty.
Data showed on Tuesday that India’s retail inflation rate had eased slightly in July, although economists said the numbers also indicated subdued demand conditions.
Meanwhile, the rupee strengthened slightly on Wednesday to a high of 70.85 against the dollar, after hitting a near six-month low on Tuesday.
The positive market reaction after Trump’s move followed several sessions dominated by negative headlines, said Dhananjay Sinha, head of institutional research at Emkay Global Financial Services in Mumbai.
“There has been a fair amount of pessimism in the last 15 days or so,” Sinha said. “Sentiment in the manufacturing sector has been weak since the trade war began. So any positive news on that front is seen as positive for the market.”
The NSE index has slipped some 9% since its highest level this year amid worries of slowing economic growth and a proposal to raise taxes for foreign portfolio investors.
Earlier this week, fears about a drawn out Sino-U.S. trade war, protests in Hong Kong and a crash in Argentina’s peso currency also drove investors to safe harbours.
Meanwhile, drugmakers Dr Reddy’s Laboratories Ltd and Sun Pharmaceutical Industries Ltd fell some 5% each and were the top decliners on the NSE index on Wednesday.
Dr Reddy’s said U.S. regulators did not approve its female contraceptive, while Sun Pharmaceutical dropped even as it reported a double-digit rise in June-quarter profits.