Indian equity markets witnessed a sharp surge in early trade, with benchmark indices rising nearly 3 per cent after the announcement of a trade agreement between India and the United States. The rally reflected strong investor optimism following tariff relief measures that are expected to benefit Indian exports and corporate earnings.
By 9:25 am, the Sensex had climbed 2,421 points, or 2.97 per cent, to reach 84,088, while the Nifty gained 741 points, or 2.96 per cent, to trade at 25,829. The gains were broad-based, indicating participation across large-cap, mid-cap and small-cap segments.
The upward momentum followed confirmation that reciprocal tariffs on Indian goods would be reduced to 18 per cent from 25 per cent under the trade arrangement. In addition, the extra 25 per cent duty linked to purchases of Russian crude oil is set to be removed. The agreement, described as taking effect immediately, is seen by market participants as a major development for trade and economic relations between the two countries.
Broader market indices outperformed, with the Nifty Midcap 100 surging 3.10 per cent and the Nifty Smallcap 100 rising 3.25 per cent. The advance suggested that risk appetite improved significantly, extending beyond frontline stocks.
Sector-wise, all major indices traded firmly in the green. Realty stocks led the gains with a rise of 4.47 per cent, followed by auto at 3.78 per cent, consumer durables at 3.69 per cent and IT at 3.04 per cent. The rally pointed to expectations of stronger demand, improved export prospects and supportive macroeconomic conditions.
Market watchers noted that India’s revised tariff level of 18 per cent now stands below that of several export-driven Asian economies, potentially enhancing the country’s competitiveness in key global markets. The development is being interpreted as supportive for manufacturing, services exports and investment flows.
Technical analysts indicated immediate support for the Nifty in the 25,600–25,800 zone, while resistance is placed around the 26,200–26,350 range. The sharp move suggests a strong near-term trend, though further consolidation could depend on follow-through buying and global cues.
Analysts tracking macro trends said the trade deal, along with other policy measures, could support higher economic growth in the coming years. Corporate earnings, which have shown signs of recovery, may accelerate further if export volumes and investment activity improve. Currency stability and foreign capital inflows are also being watched, as positive trade and policy signals often influence cross-border investment decisions.
Large-cap stocks in banking, non-banking financial services, telecom, capital goods and IT sectors are seen as potential beneficiaries, given their weight in institutional portfolios. These segments are typically sensitive to foreign investor flows, which could strengthen if global sentiment toward India improves.
Global cues also remained supportive. Asian markets traded higher, with gains seen in Japan, South Korea and China, while US indices had ended the previous session in positive territory.
Institutional flow data showed foreign institutional investors net sellers to the tune of Rs 1,832 crore in the previous session, while domestic institutional investors were net buyers of Rs 2,446 crore. The current rally suggests that sentiment may be shifting in favour of equities amid improving policy and trade signals.
The surge places Indian markets among the stronger performers in the region for the day, with the trade deal acting as a key trigger for renewed buying interest.
