Indian Markets Surge Amid US Trade Deal Optimism

Indian stock indices concluded Tuesday's trading session on a positive note, continuing the upward trend from the previous day. Analysts cite the interim trade agreement with the US, prospects of foreign institutional investors returning, and favorable signals from other Asian markets as factors contributing to this rise. The Sensex settled at 84,273.92 points, climbing 208.17 points or 0.25 percent, while the Nifty ascended to 25,935.15 points, gaining 67.85 points or 0.26 percent.

According to Vinod Nair, Head of Research at Geojit Investments, the domestic equity markets maintained their bullish momentum, buoyed by the US trade pact and encouraging trends from significant Asian economies. 'The resurgence of Foreign Institutional Investor (FII) inflows, along with the appreciation of the rupee, is enhancing investor sentiment, despite observed intermittent profit-booking across sectors. As tariff-related apprehensions diminish, the immediate market trajectory will depend on Q3 earnings, which have been mixed and underwhelming to date. Investors are now concentrating on the combined effects of recent fiscal and monetary strategies to boost earnings momentum in the forthcoming quarters,' Nair mentioned.

Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth technology firm, highlighted that the Indian equity markets ended the session cautiously and within a narrow band, as profit booking in banking, IT, and healthcare stocks emerged as key drags on the indices, keeping overall market sentiment in check. 'In the absence of robust global or domestic triggers, investors preferred selective positioning over aggressive buying,' Ponmudi R explained.

In recent developments, the US and India jointly announced that they have settled on a framework for an Interim Agreement focusing on reciprocal and mutually beneficial trade conditions. This venture aims to tackle non-tariff barriers impacting bilateral trade. Following a phone conversation between Prime Minister Narendra Modi and US President Donald Trump, negotiations concluded on the long-anticipated trade agreement. Notably, tariffs previously imposed by the Trump administration on major exporters, including India and China, have seen a substantial reduction. The tariffs on Indian goods, which stood at 50 percent since August 2025, have now been decreased to 18 percent as a result of the recent dialogue between the leaders.