India-US Interim Trade Pact Ignites Market Optimism and Export Sector Confidence
The financial landscape witnessed a significant development as the India-US interim trade pact was formally announced on Friday evening, following the initial trade deal revelation earlier in the week. This pivotal agreement, detailed in a joint statement from both nations, has already made waves globally, propelling the Dow Jones to a historic milestone above 50,000 points. With Indian markets closed over the weekend, analysts are forecasting a robust and positive opening when trading resumes on Monday, driven by renewed investor clarity and confidence.
Clarity for Investors and Boost for Export-Oriented Industries
Market specialists emphasize that this interim pact is set to dispel uncertainties among Domestic Institutional Investors (DIIs), Foreign Institutional Investors (FIIs), and retail participants. The accord is anticipated to deliver substantial advantages to key export-driven sectors, including automotive, information technology, pharmaceuticals, chemicals, defence, textiles, gems and jewellery, and apparel. Furthermore, it is expected to fortify the Indian Rupee against major global currencies, notably the US Dollar, a critical factor in luring FIIs back to India's vibrant markets.
Expert Insights on Market Dynamics and Sectoral Benefits
Sandeep Pandey, Co-founder of Basav Capital, anticipates a gap-up opening on Dalal Street, stating, "The joint statement on the interim trade pact provides much-needed clarity, eliminating confusion for all investor categories. Notably, the 25% reciprocal tariff on Russian crude oil imports has been removed, with plans to reduce it to 18% upon the deal's full implementation. As markets often preempt such events, export-focused segments are poised to attract significant investor interest upon reopening."
Avinash Gorakshkar, a SEBI-registered fundamental equity analyst, highlights the broader economic impact: "This deal will catalyze inflows into the US Dollar, aiding the Indian Rupee's recovery. A stronger rupee is likely to incentivize FIIs to re-enter the Indian stock market, fostering greater liquidity and growth."
Stocks to Watch in Light of the Trade Pact
In response to the interim trade agreement and related tariff reductions, Anuj Gupta, a SEBI-registered market expert, has identified 21 stocks across multiple sectors as potential buys for Monday:
- Pharma: Aurobindo Pharma, Cipla, Glenmark Pharmaceuticals
- Defence: BEL, HAL, Cochin Shipyard
- IT: TechM, HCL Tech, Wipro, Infosys
- Textile: Trident, Welspun Living
- Auto and Auto Ancillary: Eicher Motors, Tata Motors, TVS Motor, Bajaj Auto, JBM Auto, Bosch, Amara Raja, Exide Industries, UNO Minda
Indian Stock Market Outlook and Technical Analysis
Shrikant Chouhan, Head of Equity Research at Kotak Securities, offers a cautious yet detailed perspective: "While the intraday market texture appears weak, a sustained selloff is contingent on breaching support levels at 25,600/83,200. Should this occur, indices might decline to 25,500-25,350/83,000-82,500. Conversely, resistance is expected at 25,800/83,800, with a breakthrough potentially driving gains to 25,900-25,925/84,000-84,200."
Disclaimer: The views and recommendations expressed are those of individual analysts or broking firms and do not reflect the stance of Mint. Investors are advised to consult certified experts prior to making any investment decisions.
