Tue Feb 04 15:07:45 IST 2025: ## Indian Markets Surge on Trump’s Tariff Decision, Easing Trade War Fears

**Mumbai, India** – Indian stock markets experienced a significant rally on Tuesday, fueled by optimism surrounding the US-Mexico-Canada trade agreement and a muted response from China to recent US tariffs. The BSE Sensex soared 718.07 points (0.93%) to close at 77,904.81, while the Nifty index jumped 199.20 points (0.85%) to reach 23,560.25.

The positive market sentiment followed US President Trump’s decision to temporarily halt tariffs on Mexico and Canada, initiating negotiations instead. Analysts interpreted this as a strategic move, suggesting a similar approach might be adopted with China. This eased concerns about a full-blown trade war, which experts believe would negatively impact the US economy as well.

Several major Indian companies saw significant gains, including Larsen & Toubro (up 2.65%), Tata Motors, ICICI Bank, State Bank of India, and Infosys (all up to 2.6%). Mahindra & Mahindra also saw a notable increase. The weakening US dollar also contributed to the positive market performance.

While the recent market downturn may present investment opportunities, analysts caution investors to remain vigilant given potential economic and political uncertainties. Concerns remain regarding high global fiscal deficits and persistent inflation in the US, as reflected in global bond yields. Despite the positive day, experts advise caution, suggesting that the current market valuations might not fully reflect the increased global macroeconomic uncertainty.

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