Sensex soars 2073 points, rupee posts biggest gain in 7 years on India-US trade deal
Credit: PTI File Photo
New Delhi: India-US trade deal announcement gave a huge boost to the market sentiment with benchmark Sensex and Nifty 50 rallying by over 2.5% and rupee registering best single-day gain in over seven years on Tuesday.
The rally made investors richer by over Rs 12 lakh crore. The market capitalisation of all listed companies on the BSE jumped by Rs 467.20 lakh crore, which is over Rs 12 lakh crore higher than previous day.
The 30-stock benchmark Sensex of the BSE surged by 2072.67 points or 2.54% to 83,739.13 points. The Nifty 50 of the NSE 639.15 points or 2.55% to 25,727.55 points.
"Indian equities experienced a significant rally today, driven by the long‑anticipated India–US trade deal and a strengthening rupee, which boosted expectations of renewed FII inflows," said Vinod Nair, head of research at Geojit Investments Limited.
All sectoral indices ended in the green, led by the Nifty Realty index, which surged over 4%. The Nifty Chemical, Pharma, and Consumer Durables indices also jumped more than 3% each.
“Overall market sentiment has turned decisively positive, with global trade risks easing and moderation in the US-Iran conflict. Going forward the markets could focus more on the ongoing Q3 corporate results with a positive bias, which till date have been below estimates, because of potential future earnings upgrades led by reduction in tariff risk,” Nair said.
The Indian rupee surged by 1.36% to 90.26 against the US dollar. This is the best single-day gain in the value of the Indian currency since December 2018.
"The agreement has significantly improved sentiment, as expectations of stronger trade flows and potential FII inflows have boosted confidence in the domestic currency," said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities.
The markets rallied after US President Donald Trump announced a lower tariff on import of goods from India to 18% from the current 50%.
According to analysts, the reduction of US tariffs on Indian goods from 50% to 18% would enhance India’s competitive position among emerging markets and bolster the outlook for export‑oriented sectors with high US exposure, such as textiles, aquaculture, gems and pharmaceuticals.
“The reduction in US tariffs marks a pivotal moment for India’s gems and jewellery sector. It is not merely a financial adjustment, but a recognition of the unmatched artistry & craftsmanship that our industry brings to the world,” said Rajesh Rokde, Chairman, All India Gem & Jewellery Domestic Council.
“The United States is among the most important export destinations for India’s auto component industry. A more balanced and facilitative trade framework can unlock further growth in bilateral trade, deepen industrial collaboration, and encourage technology-led partnerships across advanced manufacturing, electrification, electronics, and clean mobility solutions,” said Vikrampati Singhania, President, ACMA .