New Delhi: India’s financial markets rallied sharply on Tuesday following the announcement of a new trade deal with the United States, which reduces tariffs on Indian goods from 50% to 18%. The rupee strengthened by 1.2% to 90.40 per dollar in early trading, marking its strongest session since November 2022.
The benchmark Sensex opened more than 3,600 points higher to cross the 85,000 mark from Monday’s close of 81,666.46, while the Nifty 50 jumped 1,200 points to trade near 26,288, bringing it within 100 points of its January record high. Government bond yields eased, with the 10-year paper falling by five basis points to 6.72%. Analysts noted that the markets were poised for their strongest single-day performance in five years.
This surge comes after a period of extreme volatility. India’s stock markets had recently recovered from losses following the “mother of all trade deals” with the European Union, which Prime Minister Narendra Modi hailed as a historic achievement. Sectors such as textiles rallied more than 12%, while automotive shares declined by 4%.
The optimism was temporarily overshadowed by the Union Budget 2026, when Finance Minister Nirmala Sitharaman’s proposals, including higher transaction taxes on stocks, spooked investors. On Sunday, the Sensex fell nearly 1,547 points, wiping out close to ₹10 lakh crore in market value, while the Nifty 50 lost 495 points, marking the worst budget-day decline in six years.
Tuesday’s positive response underscores the immediate market impact of lower US tariffs, which are expected to boost Indian exports, improve trade competitiveness, and support sectors heavily dependent on overseas demand. Traders and analysts suggested that the combination of policy support, global Rupee Hits 90.4 Per Dollar, Surges 1.2% as US Cuts Tariffs on Indian Exports
India’s financial markets rallied sharply on Tuesday following the announcement of a new trade deal with the United States, which reduces tariffs on Indian goods from 50% to 18%. The rupee strengthened by 1.2% to 90.40 per dollar in early trading, marking its strongest session since November 2022.
The benchmark Sensex opened more than 3,600 points higher to cross the 85,000 mark from Monday’s close of 81,666.46, while the Nifty 50 jumped 1,200 points to trade near 26,288, bringing it within 100 points of its January record high. Government bond yields eased, with the 10-year paper falling by five basis points to 6.72%. Analysts noted that the markets were poised for their strongest single-day performance in five years.
This surge comes after a period of extreme volatility. India’s stock markets had recently recovered from losses following the “mother of all trade deals” with the European Union, which Prime Minister Narendra Modi hailed as a historic achievement. Sectors such as textiles rallied more than 12%, while automotive shares declined by 4%.
The optimism was temporarily overshadowed by the Union Budget 2026, when Finance Minister Nirmala Sitharaman’s proposals, including higher transaction taxes on stocks, spooked investors. On Sunday, the Sensex fell nearly 1,547 points, wiping out close to ₹10 lakh crore in market value, while the Nifty 50 lost 495 points, marking the worst budget-day decline in six years.
Tuesday’s positive response underscores the immediate market impact of lower US tariffs, which are expected to boost Indian exports, improve trade competitiveness, and support sectors heavily dependent on overseas demand. Traders and analysts suggested that the combination of policy support, global demand prospects, and reduced trade barriers drove the dramatic rebound in equities and the currency.
demand prospects, and reduced trade barriers drove the dramatic rebound in equities and the currency.
