Indian equities rebounded sharply after Union Budget 2026, with Nifty and Sensex rising nearly 3 per cent, boosted by the India-US trade deal cutting tariffs from 25 per cent to 18 per cent, triggering broad-based buying across sectors
Indian stock markets soar 3 per cent as India-US trade deal slashes tariffs
After a sudden decline in market indices on the day of Union Budget 2026, the Indian equity markets have surged sharply by around 3 per cent early on Tuesday. With broad-based buying across sectors, Nifty opened and experienced a significant gain, while Bank Nifty and Sensex also saw a significant rise.
As of 9:25 am, Sensex on Tuesday added 2,421 points, or 2.97 per cent, to reach 84,088, while the Nifty50 gained 741 points, or 2.96 per cent, to settle at 25,829, as per IANS.
Nifty bullish in afternoon trade
Benchmark domestic equity indices, Sensex and Nifty, were trading on a bullish note in afternoon trade today, climbing around 2.8 per cent. The Sensex soared 2,301 points to 83,968, while the Nifty advanced 710 points to 25,799 when reports last came in. All sectoral indices surged, with Realty, Services, Power and Capital Goods emerging as the major gainers. Market sentiment improved significantly after the India-US trade deal announcement removed a key overhang.
India-US trade agreement
India and the United States, during the late hours of Monday, have finally agreed to a trade agreement under which reciprocal tariffs on Indian goods will be slashed to 18 per cent from 25 per cent.
The trade agreement also eliminates the additional 25 per cent duty on purchases of Russian crude oil.
US President Donald Trump on Monday said that the trade deal will be "effective immediately", following a phone call with Prime Minister Narendra Modi offering immediate tariff relief for India.
Indian stock market all green after a bloodbath on Sunday
Main broad-cap indices on the Indian stock markets posted strong gains, as the Nifty Midcap 100 surged 3.10 per cent, and the Nifty Smallcap 100 added 3.25 per cent.
All sectoral indices showed huge gains, with realty, auto, consumer durables and IT being the major gainers, up 4.47 per cent, 3.78 per cent, 3.69 per cent and 3.04 per cent, respectively, as per IANS.
India now enjoys lower tariff rates than other countries.
With tariff rates being slashed down to 18 per cent, India's tariff rate is now lower than that of several major export-orientated Asian economies. Bangladesh, Sri Lanka, Taiwan and Vietnam face tariffs of 20 per cent, while Indonesia, Malaysia, Thailand, the Philippines and Pakistan face tariffs of 19 per cent.
Market experts on Tuesday after a steep recovery said, “Immediate support for Nifty lies at 25,600-25,800 zone, while resistance is anchored at 26,200–26,350 zone,” as cited by IANS.
One of the analysts, while hailing the Indian stock market’s sudden upscale, asserted, "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, as its delay was the single important factor weighing on the markets," as per IANS.
Various sectors may see huge inflows after the India-US trade agreement
Large caps, including banking leaders, non-banking financials, telecom, capital goods and IT, which are trading the favourites of FII, can see huge inflows, market watchers said.
Apart from the Indian stock markets, the US markets also ended largely in the green in the last trading session, as Nasdaq gained 0.56 per cent while the S&P 500 advanced by 0.54 per cent, with the Dow adding 1.05 per cent.
On February 2, foreign institutional investors (FIIs) net sold equities worth Rs 1,832 crore, while domestic institutional investors (DIIs) were net buyers of equities worth Rs 2,446 crore.
(With inputs from IANS)
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