Indian Markets Surge as India–US Trade Deal Lifts Investor Sentiment

Indian Markets Surge as India–US Trade Deal Lifts Investor Sentiment

Indian equity benchmarks opened sharply higher on Tuesday morning, reacting strongly to the announcement of a long-awaited trade agreement between India and the United States. The Nifty 50 jumped nearly 750 points at the opening bell, while the Sensex surged about 2,400 points, reflecting broad-based buying across sectors.

The rally followed confirmation from US President Donald Trump that Washington had agreed to cut tariffs on Indian goods to 18 per cent, down from 50 per cent. In return, India will halt purchases of Russian oil and lower certain trade barriers. Trump announced the deal in a post on his social media platform, Truth Social, late Monday.

Prime Minister Narendra Modi welcomed the development, thanking President Trump for what he described as a “wonderful announcement” on behalf of India’s 1.4 billion people. The swift exchange of messages underscored the political significance of the agreement and its potential economic impact.

Rupee strengthens, markets buoyant

The positive mood spilled over into the currency market as well. The Indian rupee opened stronger at 90.40 against the US dollar, gaining around ₹1.10 in early trade, supported by expectations of improved trade flows and renewed foreign investment interest.

Market participants said the deal could ease concerns over export competitiveness and help stabilise India’s external balance, at least in the near term. “The tariff cut is a big relief for exporters, and the clarity around trade policy is something investors were waiting for,” said a Mumbai-based fund manager.

Asian markets join the rebound

The upbeat sentiment wasn’t limited to India. Asian markets also traded higher after a volatile start to the week. Japan’s Nikkei rose 2.5 per cent, recovering Monday’s losses, while South Korea’s KOSPI climbed 4 per cent. Hong Kong futures pointed to a positive open, and US S&P 500 futures were up 0.3 per cent as investors looked ahead to a busy earnings calendar.

Gold prices steadied as well, with traders taking comfort from calmer trade signals after recent sharp swings in metals markets. A strong reading in US factory activity overnight also helped lift risk appetite across the region.

Outlook for the day

With the India–US trade deal now official, analysts expect foreign institutional investors to turn more constructive on Indian equities in the short term. Markets are likely to remain sensitive to further details on the implementation of the agreement, as well as global cues from earnings and macroeconomic data.

For now, the opening surge signals a clear vote of confidence from investors, who appear ready to price in the potential benefits of improved trade ties between New Delhi and Washington.