Indian Stock Market Surges on US-India Trade Agreement
The Indian stock market opened the trading week with robust gains on February 09, as key indices climbed over 0.60% following a significant trade agreement between the United States and India. Market sentiment received a substantial boost from the bilateral framework, which triggered widespread buying activity, particularly in export-oriented sectors.
Index Performance and Market Movements
The Nifty 50 index closed at 25,870, marking a gain of 176 points or 0.70%. Simultaneously, the S&P BSE Sensex increased by 0.60% to settle at 84,072. Broader market indices outperformed the benchmarks, with the Nifty Midcap 100 rising by 1.60% and the Nifty Smallcap 100 rallying impressively by 2.64%.
Top gainers for the day included:
- Shipping Corporation of India
- Kalyan Jewellers
- BEML Limited
- State Bank of India
- Kaynes Technology
US-India Trade Agreement Details
The market rally was primarily fueled by a joint statement released on Friday, where both nations agreed to reduce tariffs on each other's goods. US President Donald Trump signed an executive order to revoke the additional 25% tariff previously imposed on Indian products, which was related to India's purchases of Russian oil. This action lowered the effective tariff from 50% to 18%.
According to the agreement, India has committed to purchasing approximately USD 500 billion worth of US products over the next five years. This substantial procurement will include energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal.
Additional Market Drivers
Several other factors contributed to the positive market environment:
- Easing Geopolitical Tensions: Reduced concerns about supply shortages have led to further cooling in crude oil prices.
- Weaker US Dollar: A softer dollar has created favorable conditions for market rallies.
- Foreign Portfolio Investments: Foreign Portfolio Investors (FPIs) have turned bullish on Indian markets, injecting ₹8,129 crore in February alone, as reported by the National Securities Depository Limited (NSDL).
The combination of these elements has created an optimistic trading atmosphere, with investors showing increased confidence in the Indian economic landscape. Market analysts are closely monitoring these developments for their potential long-term impact on various sectors and overall market stability.
