- Nifty gained up to 5%, nearing an all-time high, while Sensex rose 4,200 points to 85,871
- Indian Rupee strengthened 1.2% to 90.4263 per dollar; 10-year bond yield fell to 6.71%
- Export sectors, especially textiles, saw many stocks hit 20% upper circuit amid strong buying
Indian equity markets are witnessing a powerful relief rally on Tuesday, fueled by the landmark completion of the US-India Trade Deal. Benchmarks surged as the US reduced reciprocal tariffs on Indian goods from 25% to 18%, a rate now lower than regional competitors like Vietnam and Bangladesh (20%).
The Nifty had gained as much as 5% to just a few dozen points short of an all time high in early trade. The BSE Sensex had risen as much as 4,200 points to 85,871.
The deal acted as a catalyst for the Indian Rupee, which strengthened 1.2% to 90.4263 per dollar. Simultaneously, the 10-year bond yield dropped by 5 basis points to 6.71%, signaling easing inflationary concerns and a pivot in global fund flows toward India.
Brokerages turned more constructive on Indian equities following the announcement, while corporate India also welcomed the deal, citing improved visibility for exports and investment flows.
DII Support and Expiry Dynamics
Domestic institutional investors (DIIs) provided a solid floor with heavy basket buying, while the "short covering" ahead of the Nifty expiry amplified the upward momentum. The optimism was particularly visible in the SMIDs (Small and Mid-cap) space, where broader indices jumped on high-conviction buying.
Textile Leads the Charge
The impact of lower tariffs was most evident in export-oriented sectors. A staggering number of stocks hit the 20% upper circuit, led by textile giants and specialized manufacturers.
Several stocks hit the 20% upper circuit, reflecting sharp risk-on positioning. These included KPR Mill, Welspun Living, Apar Industries, Gokaldas Exports, Avalon Technologies, Garware Hi-Tech, Pokarna, Yasho Industries, Indo Count, Camlin Fine Sciences, Kitex Garments, Goldiam, GNA Axles, Pearl Global and Apex Frozen Foods.
In terms of the India-US trade deal, India has publicly confirmed one key element of the agreement: the reduction of US tariffs on Indian goods to 18%, down from a reciprocal tariff of 25% and a peak effective tariff of 50% imposed earlier.
The new rate places India below Pakistan's 19% tariff and marks a sharp reversal from the punitive duties imposed last year, including a 25% levy linked to India's purchase of Russian oil.
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