Mumbai: Stock market benchmark indices Sensex and Nifty surged in early trading session on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent from the current 25 per cent.
The 30-share BSE Sensex jumped 3,656.74 points to 85,323.20 in the opening trade. The 50-share NSE Nifty surged 1,219.65 points to 26,308.05.
Later, both the benchmark indices further extended their winning momentum. The BSE benchmark zoomed 4,205.27 points or 5.14 per cent to 85,871.73. The Nifty jumped 1,252.8 points or 4.99 per cent to 26,341.20.
Main broad-cap indices posted strong gains, as the Nifty Midcap 100 surged 3.10 per cent, and the Nifty Smallcap 100 added 3.25 per cent.
All sectoral indices showed huge gains with realty, auto, consumer durables, and IT being the major gainers, up 4.47 per cent, 3.78 per cent, 3.69 per cent, and 3.04 per cent, respectively.
At 18 per cent, India’s tariff rate is now lower than that of several major export-oriented Asian economies. Bangladesh, Sri Lanka, Taiwan, and Vietnam face tariffs of 20 per cent, while Indonesia, Malaysia, Thailand, the Philippines, and Pakistan face tariffs of 19 per cent.
Immediate support for Nifty lies at the 25,600-25,800 zone, while resistance is anchored at the 26,200–26,350 zone, market watchers said.
“The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50 per cent to 18 per cent is a game changer for the Indian economy and stock markets, as its delay was the single most important factor weighing on the markets,” an analyst said.
According to market watchers, India’s growth rate will rise to around 7.5 per cent in FY27, assisted by higher exports to the US from the deal, and corporate earnings already on revival could accelerate to around 16 per cent to 18 per cent in FY27.
Analysts also said that the rupee will rebound sharply, adding that the combination of the US-India trade deal, the EU-India trade deal, and the growth-oriented Budget will boost the market sentiment. The positive sentiment could trigger immediate foreign capital inflows, potentially turning India’s Balance of Payments (BoP) position.
Large caps, including banking leaders, non-banking financials, telecom, capital goods, and IT, which are trading the favourites of FII, can see huge inflows, market watchers said.
In Asian markets, China’s Shanghai index gained 0.38 per cent, and Shenzhen added 0.93 per cent, Japan’s Nikkei surged 3.23 per cent, and Hong Kong’s Hang Seng Index edged up 0.11 per cent. South Korea’s Kospi surged 5.04 per cent.
The US markets ended largely in the green in the last trading session as Nasdaq gained 0.56 per cent. The S&P 500 advanced 0.54 per cent, and the Dow added 1.05 per cent.
On February 2, foreign institutional investors (FIIs) net sold equities worth Rs 1,832 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 2,446 crore.
