The Indian stock market experienced a spectacular surge in opening trade on Tuesday, with benchmark indices soaring dramatically in response to the landmark India-US trade deal announcement. The breakthrough agreement, jointly revealed by US President Donald Trump and Prime Minister Narendra Modi, triggered widespread optimism among investors, propelling both Nifty50 and BSE Sensex to remarkable heights.
Market Performance Highlights
In early trading sessions, the Nifty50 index surged past the 25,800 mark, registering an impressive gain of 723 points or 2.88% to reach 25,811.40 by 9:16 AM. Simultaneously, the BSE Sensex demonstrated extraordinary momentum, climbing 2,304 points or 2.82% to settle at 83,970.33. This substantial upward movement reflects the market's enthusiastic reception of the bilateral trade agreement that promises to reshape India's economic landscape.
Expert Analysis: A Game-Changing Development
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided comprehensive insights into the deal's significance. He emphasized that the announcement represents a transformative moment for both the Indian economy and financial markets. "The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50% to 18% is a game changer," Dr. Vijayakumar stated, highlighting how market uncertainty surrounding the deal's delay had previously weighed on investor sentiment.
The investment strategist outlined three critical impacts expected from the agreement:
- Economic Growth Acceleration: India's growth rate is projected to rise to approximately 7.5% in FY27, supported by enhanced exports to the United States.
- Corporate Earnings Revival: Corporate earnings showing early signs of recovery in FY27 could accelerate to between 16% and 18%.
- Currency Strengthening: The Indian rupee is anticipated to strengthen significantly against major global currencies.
Market Dynamics and Sectoral Focus
Dr. Vijayakumar further explained that the convergence of multiple positive factors—including the India-US trade deal, the EU-India trade agreement, and growth-oriented budgetary policies—would collectively boost market sentiment and stimulate economic activity. He noted that the stock market, anticipating these developments, would likely experience sustained upward momentum.
From a technical perspective, the market's substantial short positions are expected to trigger extensive short-covering, potentially amplifying the rally. While gains are anticipated across market capitalizations, large-cap stocks—particularly those favored by foreign institutional investors—may demonstrate superior performance. Banking leaders, non-banking financial companies, and blue-chip stocks in telecommunications, capital goods, and information technology sectors are poised for significant appreciation.
Textile stocks are expected to receive special attention from investors, potentially benefiting substantially from improved trade terms and market access.
Global Market Context
Meanwhile, US equity markets closed higher on Monday, with artificial intelligence and semiconductor stocks leading gains. Small-cap shares outperformed broader market indices, with the Russell 2000 advancing approximately 1% and extending its lead over both the S&P 500 and Nasdaq Composite indices in 2026.
This synchronized positive movement across global markets underscores the interconnected nature of international trade agreements and their far-reaching implications for financial ecosystems worldwide.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
