Benchmark indices Sensex and Nifty jumped more than 2 percent on Tuesday, supported by positive global cues and a temporary tariff relief on electronics announced by US President Donald Trump. The market opened on a strong note after Monday’s holiday, with gains led by banking, auto, and IT shares.

The BSE Sensex surged 1,750.37 points or 2.32 percent to hit an intraday high of 76,907.63, while the NSE Nifty rose 539.80 points or 2.36 percent to touch 23,368.35. All the sectoral indices were trading in the green.

1) Trump’s tariff exemptions offer temporary relief: Investor sentiment got a boost after Donald Trump, in a statement on Saturday, announced a temporary exemption for a range of consumer electronics — including smartphones, laptops and PCs — from a proposed 125 percent tariff on Chinese goods and a 10 percent global flat rate. He also hinted at possible relief for the automotive sector facing steep import duties.

However, market participants remained cautious as Trump clarified a day later that the items are "just moving to a different tariff bucket". He also indicated that new duties on imported semiconductors could be announced later this week.

"Global indices across the US, Asia, and Europe gained 3–4 per cent over Friday and Monday, after the US government excluded computers and other electronics from reciprocal tariffs. This move is being seen as a significant softening of the US stance toward China, boosting global sentiment.

"Adding to the positive outlook, US President Donald Trump announced on Monday that he is considering exemptions on tariffs for imported vehicles and auto parts. Last week, he also declared a 90-day pause on tariffs for all countries except China, signalling a potential window for trade negotiations and easing global trade war concerns," Vikas Jain, Head of Research, Reliance Securities, said.

2) Positive global cues: Major US indices ended higher on Monday, supported by gains in tech stocks, particularly Apple, after the White House’s move to delay tariffs. The Dow Jones Industrial Average climbed 312.08 points or 0.78 percent to 40,524.79. The S&P 500 rose 0.79 percent and the Nasdaq Composite added 0.64 percent. In Asian markets, South Korea's Kospi index, Tokyo's Nikkei 225, and Hong Kong's Hang Seng were trading in the positive territory while Shanghai SSE Composite index quoted lower.

3) Rupee rises: The rupee appreciated by 39 paise to 85.71 against the US dollar in early trade on Tuesday. Forex traders attributed the gains to strong domestic equities, weakness in the US dollar index, and lower crude prices.

4) VIX eases: The India VIX, a measure of market volatility, dropped sharply by 16.6 percent to 16.77, indicating lower nervousness among traders.

"On the upside, the market may encounter resistance at 23300/23500 levels. Crossing and closing above 23800 levels would indicate a potential move towards higher targets, which would ultimately test the strength of the long-term market trend. Conversely, if the market sustains below the 22800 level, it could lead to gradual weakness towards 22500. Considering the breadth of the market, we believe it has likely experienced its worst phase for at least the medium term. The strategy should focus on buying on dips around support levels.

"For the Bank Nifty, after a correction, it rebounded sharply and is currently trading near the 200-day SMA. For trend-following traders, the 200-day SMA, or levels around 51,000 and 50,500, would act as key support areas for the bulls. As long as it remains above these levels, the bullish sentiment is expected to continue. On the upside, it could retest the range of 51,800 to 52,500. However, if it falls below 50,500, the chances of reaching levels of 50,200 to 50,000 would increase," said Shrikant Chouhan, Head Equity Research, Kotak Securities.

5) Heavyweights lead the charge: Heavy buying was seen in large-cap stocks such as Tata Motors, Larsen & Toubro, and IndusInd Bank. The Nifty Bank index was up 2.35 percent, crossing the 52,000 mark. Private lenders HDFC Bank and ICICI Bank gained nearly 3 percent each, with analysts at Jefferies citing lower deposit rates as a key positive for the sector.

Technical expert speaks

"On the levels front, the zone of 22,600-22,500 is anticipated to act as a support against any potential declines in the upcoming week, followed by the 22,200-22,000 mark, in case global market conditions remain turbulent. Conversely, the index faces an intermediate resistance at 23,000, following this, another critical threshold at 23,200-23,300, aligning closely with the 89-DEMA," said Sameet Chavan, Head Research, Technical and Derivative - Angel One.

"On the upside, 23,200 may act as the immediate resistance, followed by 23,360 and 23,500. Bank Nifty charts indicate potential support at 51,200, followed by 51,000 and 49,700. If the index moves higher, resistance could emerge at 50,700, with subsequent levels at 51,000 and 50,800," said Mandar Bhojane, Research Analyst, Choice Broking.