India-US Trade Deal Ignites Record Stock Rally, Nifty Soars 4.8%

Benchmark indices witnessed record gains at the opening bell, reflecting strong investor optimism across sectors.

The Nifty 50 index opened at 26,308.05, up by 1,219.65 points or 4.86 per cent, while the BSE Sensex jumped 3,656.74 points or 4.48 per cent to open at 85,323.20.

The markets opened on a strong positive note, exploding in positive territory amid improved global risk sentiment after the trade deal announcement.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, 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."

He added, "The impact of the deal will be manifold: One, India's growth rate will rise to around 7.5 per cent in FY27 assisted by higher exports to the US. Two, corporate earnings already showing signs of revival in FY 27 can accelerate to around 16 to 18 per cent. Three, rupee will strengthen sharply."

Vijayakumar further said, "The combination of US-India trade deal, the EU-India trade deal and the growth-oriented Budget will boost the market sentiments and the animal spirits in the economy."

He noted that the stock market, anticipating and discounting these developments, will boom. "Technically, the market which is hugely short, will witness short-covering adding fuel to the rally. The rally will be widespread across market caps; but the large caps which are fairly valued have the potential to outperform aided by FII inflows," he said.

According to him, "The FII favourites in large caps like the banking leaders, non-banking financials and other bluechips in telecom, capital goods and IT, will surge. Textile stocks will be on special focus. This is going to be the beginning of a boom in the Indian stock markets taking it to new records."

In the broader market on the NSE, the Nifty 100 rose nearly 4 per cent, the Nifty Smallcap index surged 4.6 per cent, while the Nifty Midcap index gained 4.05 per cent.

Among sectoral indices, Nifty Auto jumped 5 per cent, Nifty IT gained 5.85 per cent, Nifty FMCG rose 1.8 per cent, Nifty Metal surged 3.88 per cent, Nifty Pharma climbed 4.27 per cent, and Nifty Consumer Durables advanced 4.25 per cent.

Vedanta shares gained 3.38 per cent to Rs 683, while Hindustan Zinc shares rose 2.8 per cent to Rs 627.

Ponmudi R, CEO of Enrich Money, said, "The reduction in reciprocal tariffs on Indian goods to 18 per cent from 25 per cent has significantly lifted global risk sentiment, with GIFT Nifty indicating a sharp gap-up opening, nearly 3 per cent higher overnight."

He added, "This positive external trigger is helping markets look past the recent post-Budget volatility triggered by the Union Budget 2026-27, where the unexpected hike in STT on derivatives led to a sharp knee-jerk sell-off."

The cheer in the Markets followed US President Donald Trump's announcement of a trade deal with India, months after imposing 50 per cent tariffs on Indian goods in August 2025. The agreement, unveiled on Trump's social media platform Truth Social, features significant tariff reductions and includes claims that India would halt purchases of Russian oil. Trump had earlier levied a 50 per cent tariff on India, with 25 per cent linked to crude imports from Russia, as administration officials repeatedly alleged that India's oil purchases helped finance Russia's war against Ukraine.

Meanwhile, gold prices on MCX surged around 2 per cent on Tuesday to Rs 1,47,355 per 10 grams (24 kt), while silver prices jumped by Rs 14,175 or 6 per cent to Rs 2,50,436 per kg at the time of filing this report.

On the fund flow front, foreign institutional investors (FIIs) were net sellers to the tune of Rs 1,832.5 crore on Monday, while domestic institutional investors (DIIs) were net buyers worth Rs 2,446.3 crore.

Asian markets also opened strong, with Japan's Nikkei 225 surging over 3 per cent, South Korea's KOSPI jumping 4 per cent, Taiwan's weighted index gaining 1.46 per cent, and Singapore's Straits Times rising 0.8 per cent. Hong Kong's Hang Seng index, however, traded lower by 0.13 per cent.

- ANI