Stock markets cheer India-US trade deal: Sensex jumps over 5%; Nifty nears all-time high

New Delhi: Stock market benchmark indices Sensex and Nifty surged in early trading session on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 percent from current 25 percent.

The 30-share BSE Sensex jumped 3,656.74 points to 85,323.20 in opening trade. The 50-share NSE Nifty surged 1,219.65 points to 26,308.05.

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Later, both the benchmark indices further extended their winning momentum. The BSE benchmark zoomed 4,205.27 points or 5.14 percent to 85,871.73. The Nifty jumped 1,252.8 points or 4.99 percent to 26,341.20.

India and the US have agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 percent from current 25 percent, US President Donald Trump said on Monday after a phone conversation with Prime Minister Narendra Modi.

From the Sensex firms, Adani Ports, Bajaj Finance, Eternal, Bajaj Finserv, InterGlobe Aviation and Reliance Industries were trading sharply higher in the range of 7.2-3.7 percent.

ITC emerged as the only laggard from the blue-chip pack.

"The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50 percent to 18 percent is a game changer for the Indian economy and stock markets.

"The combination of the 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. The stock market, anticipating and discounting these developments will boom," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

In Asian markets, South Korea's Kospi rebounded and jumped 5 percent. Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index were also trading higher.

US markets ended higher on Monday.

Foreign institutional investors offloaded equities worth Rs 1,832.46 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,446.33 crore, according to exchange data.

Brent crude, the global oil benchmark, dipped 0.51 percent to USD 65.96 per barrel.

On Monday, the Sensex jumped 943.52 points or 1.17 percent to settle at 81,666.46. The Nifty climbed 262.95 points or 1.06 percent to end at 25,088.40.

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