From Trump’s tariff delay to RBI’s record dividend, here’s what fueled the robust gains in Indian equities
May 26, 2025: The Indian stock market closed Monday on a high, with the Sensex rising over 450 points and the Nifty 50 crossing the key 25,000 mark for the first time ever. This marks the second consecutive session of gains, as investor sentiment remains buoyed by a mix of domestic and global cues.
The Sensex opened at 81,928.95 and surged 771 points intraday to reach 82,492.24, eventually settling at 82,176.45 — up 455 points or 0.56%. The Nifty 50 also saw impressive gains, climbing 148 points to close at 25,001.15. Market capitalisation of BSE-listed firms jumped over ₹3 lakh crore to ₹445 lakh crore.
Also Read: Gold Prices Today in Major Cities: May 26, 2025
Here’s what drove the rally:
- Trump Delays EU Tariffs
In a relief for global trade sentiment, US President Donald Trump delayed the 50% tariffs on EU imports until July 9. This reassured global markets, especially Asian equities, with India benefitting from the reduced trade war fears. Experts note that as the EU is a key trading partner for India, the delay also benefits Indian exports routed through the bloc.
- RBI’s Record Dividend Boosts Fiscal Health
On Friday, the Reserve Bank of India announced a record ₹2.69 lakh crore dividend to the central government for FY25 — the highest-ever payout. This windfall is expected to help the government maintain its 4.4% fiscal deficit target for FY26, easing concerns about public finances and supporting the market’s upward trajectory. - Dollar Weakness Favors Emerging Markets
The dollar index has declined for three straight sessions, trading near one-month lows. This has driven more foreign capital into Indian equities and other emerging markets. - Strong Domestic Macros and Growth Prospects
India’s macroeconomic fundamentals are robust, with inflation trending down and scope for further rate cuts by the RBI. Q4 GDP growth is pegged at 6.9%, while NITI Aayog’s BVR Subrahmanyam confirmed India has overtaken Japan as the world’s fourth-largest economy. The prospect of India soon surpassing Germany to become the third-largest economy is also stoking optimism. - Retail Participation Remains Strong
The influx of retail investors continues to support market momentum. Over six lakh new investors entered the Indian capital markets just last week, underscoring the broad-based domestic interest.
Experts say the rally reflects both short-term relief and long-term optimism, with India’s domestic strength and global cues aligning to drive gains across the board.
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Sensex, Nifty 50, Indian stock market, RBI dividend, Trump tariffs delay, dollar index, India fourth largest economy, retail investors, macroeconomic outlook, stock market analysis