Indian equity benchmarks are poised for a strong opening on Tuesday after staging a sharp rebound in the previous session and surging in pre-opening trade this morning following a major breakthrough in India-US trade relations.
Markets have soared in early indications after the US and India announced a trade agreement on Monday under which US tariffs on Indian goods have been reduced to 18 per cent from 50 per cent. The development has significantly lifted investor sentiment, setting the stage for a gap-up start after Monday’s recovery rally.
The BSE Sensex rang the opening bell today a little over 84,050, skyrocketing close to 2,400 points, while the NSE Nifty50 ballooned over 700 points and neared 25,800, as of 9:15 AM.
On the 30-share Sensex, ITC emerged as the only laggard this morning. Meanwhile, the gainers were dominated by Adani Ports, Bajaj Finance, Eternal, Bajaj Finserv, and IndiGo. In the broader markets, all the indices traded with robust gains. The Nifty Smallcap50 led the list with a rally of 3.54 per cent.
Sectorally, the Realty and Chemicals index zoomed 4.16 per cent and 3.99 per cent respectively. In the pre-open hour, the Sensex soared a whopping 3,657 points and crossed 85,300 and the Nifty surged over 1,200 points to surpass 26,300, near 9:10 AM.
Monday’s Rebound After Budget Shock
On Monday, benchmark indices bounced back strongly after suffering a steep sell-off during the special Budget Day session on Sunday. Value buying in blue-chip oil & gas, banking and auto stocks helped markets recover from the heavy losses triggered by the Securities Transaction Tax (STT) hike on derivatives.
The Sensex rallied 943.52 points, or 1.17 per cent, to close at 81,666.46. During the session, it climbed as much as 1,009.31 points, or 1.25 per cent, to touch 81,732.25.
The Nifty advanced 262.95 points, or 1.06 per cent, to settle at 25,088.40. In intra-day trade, the index gained 282.65 points, or 1.13 per cent, to reach 25,108.10.
Analysts attributed the recovery to value buying after the sharp Budget Day correction and a steep decline in global crude oil prices, which provided additional comfort to investors.
Manufacturing Data And Budget Cues
Fresh macroeconomic data offered mixed signals. India’s manufacturing activity showed a slight improvement in January, with the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising from 55 in December to 55.4 in January. In PMI terms, a reading above 50 indicates expansion.
At the same time, business confidence slipped to its lowest level in three-and-a-half years, according to the survey released on Monday.
Finance Minister Nirmala Sitharaman, while presenting the Rs 53.5 lakh crore Union Budget for 2026-27 on Sunday, announced measures aimed at boosting manufacturing, offering long-term tax incentives for global data centres, and extending support to agriculture and tourism. The Budget signalled continued fiscal consolidation and infrastructure spending, despite elections due in five key states.
However, the hike in STT on equity derivatives had rattled markets during the special session, with indices plunging nearly 2 per cent before recovering partially.
On Sunday, the Sensex had ended at 80,722.94, down 1,546.84 points or 1.88 per cent, while the Nifty had declined 495.20 points or 1.96 per cent to close at 24,825.45.
Trade Deal Sparks Fresh Optimism
The announcement of the India-US trade agreement on Monday, with tariffs cut to 18 per cent from 50 per cent, has dramatically altered near-term sentiment. The reduction is expected to ease pressure on exporters, improve corporate earnings visibility and attract renewed foreign investor interest.
