Mumbai (Maharashtra): Indian equity markets opened Tuesday with a historic surge, buoyed by positive global cues following the announcement of a pivotal India-US trade deal.

The Nifty 50 index jumped 1,219.65 points (4.86%) to open at 26,308.05, while the BSE Sensex gained 3,656.74 points (4.48%), opening at 85,323.20, marking record early trade gains.

Chief Investment Strategist at Geojit Investments VK Vijayakumar said, “The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50 per cent to 18 per cent is a game changer for the Indian economy and stock markets.”

“The impact of the deal will be manifold: One, India's growth rate will rise to around 7.5 per cent in FY27 assisted by higher exports to the US. Two, corporate earnings already showing signs of revival in FY27 can accelerate to around 16 to 18 per cent. Three, rupee will strengthen sharply,” he added.

Vijayakumar further noted, “The combination of US-India trade deal, the EU-India trade deal and the growth-oriented Budget will boost the market sentiments and the animal spirits in the economy. Technically, the market which is hugely short, will witness short-covering adding fuel to the rally. The rally will be widespread across market caps; but the large caps which are fairly valued have the potential to outperform aided by FII (Foreign Institutional Investor) inflows.”

He highlighted key sectors likely to benefit. “The FII favourites in large caps like the banking leaders, non-banking financials and other bluechips in telecom, capital goods and IT, will surge. Textile stocks will be on special focus. This is going to be the beginning of a boom in the Indian stock markets taking it to new records,” he said.

On the broader market, the Nifty 100 rose nearly 4%, Nifty Smallcap jumped 4.6%, and Nifty Midcap gained 4.05%. Sectoral indices also rallied sharply: Nifty Auto (+5%), Nifty IT (+5.85%), Nifty FMCG (+1.8%), Nifty Metal (+3.88%), Nifty Pharma (+4.27%), and Nifty Consumer Durables (+4.25%).

Among individual stocks, Vedanta gained 3.38% to Rs 683, while Hindustan Zinc rose 2.8% to Rs 627.

Ponmudi R, CEO of Enrich Money, said, “The reduction in reciprocal tariffs on Indian goods to 18 per cent from 25 per cent has significantly lifted global risk sentiment, with GIFT Nifty indicating a sharp gap-up opening, nearly 3 per cent higher overnight.”

He added, “This positive external trigger is helping markets look past the recent post-Budget volatility triggered by the Union Budget 2026-27, where the unexpected hike in STT on derivatives led to a sharp knee-jerk sell-off.”

The cheer in the markets followed US President Donald Trump’s announcement of a trade deal with India, months after imposing 50% tariffs on Indian goods in August 2025. The agreement, unveiled on Truth Social, includes tariff reductions and mentions India halting Russian oil purchases.

Meanwhile, gold prices on MCX rose around 2% to Rs 1,47,355 per 10 grams (24 kt), and silver jumped 6% to Rs 2,50,436 per kg.

On fund flows, FIIs were net sellers worth Rs 1,832.5 crore on Monday, while DIIs were net buyers of Rs 2,446.3 crore.

Asian markets also opened strong, with Japan’s Nikkei 225 up 3%, South Korea’s KOSPI +4%, Taiwan Weighted Index +1.46%, and Singapore’s Straits Times +0.8%, while Hong Kong’s Hang Seng traded lower by 0.13%.

ANI