A big surprise hit Indian markets on Tuesday after news broke that India and the United States had struck a long-awaited trade deal. The first sign of the impact was on GIFT Nifty, which jumped about 800 points which is roughly 3% on the NSE International Exchange (NSE IX) in early trading on the news.
The trade deal announcement came from former US President Donald Trump, who said on his social platform that both countries agreed to cut reciprocal tariffs on goods. As per reports, the United States will reduce its tariff on Indian imports from 25% to 18%, and India will also cut its own tariffs and non-tariff barriers on American goods.
Investor Confidence Returns as GIFT Nifty shows
According to reports, that tariff drop was the key driver behind the market reaction. In many sectors, investors had been waiting for clarity on trade terms for months. High tariffs were hurting export-oriented businesses, and uncertainty had kept foreign investors on the sidelines. With the deal in place, confidence suddenly came back.
Sonam Srivastava, Founder and Fund Manager at Wright Research PMS, she explained why GIFT Nifty shot up and sais that “The sharp surge in GIFT Nifty reflects an immediate repricing of risk, driven by expectations of improved trade competitiveness, lower input costs for exporters and stronger bilateral economic alignment between the two countries.”
Expert View on GIFT Nifty Jump
Analysts say the deal could help support a broader rally when Indian markets open on Dalal Street. The 800-point surge in GIFT Nifty is seen as a signal that the Sensex and Nifty 50 could open sharply higher, with many stocks rising right from the bell.
Reports say that investors are now looking closely at at least 20 key stocks that could benefit from the improved trade outlook. Exporters, textile, auto parts, engineering and IT companies with strong US links are among the names in focus.
Strong Opening Seen for Dalal Street as GIFT Nifty shows
The deal is also expected to make Indian products more competitive in the US market because of the tariff cuts, boosting orders and potentially helping margins for exporters over time.
This development not only lifts market sentiment but also boosts expectations that foreign portfolio investors (FPIs) may return to Indian equities, after being cautious due to previous trade uncertainty.
