India US Trade Deal: The domestic market took a U-turn amid positive progress in India-US trade deal. The Sensex so far recovered 1,956 points from the day's low to hit an intraday high of 82,718.14. Likewise, the Nifty 50 rebounded 622 points to reclaim the 25,000 level. It has so far touched an intraday high of 25,116.25.
The headline indices had opened the session on a weak note, with Sensex falling over 500 points and Nifty 50 slipping by up to 170 points.
The broader indices, however, traded around the same level as it traded in early morning, with minimal movement. As of 3 PM, Nifty Midcap 100 traded around 0.7 per cent higher, and Nifty Smallcap 100 traded up by 0.6 per cent.
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On the sectoral front, auto, metal and realty led the gains, rising between 1.8 per cent and 2 per cent. All the sectoral indices traded in green, as of the time of filing this report. Nifty Bank traded higher by around 1 per cent, trading above 55,400 level.
Trump Says India Offered To Charge No Tariffs
The sudden recovery came after the United States (US) President Donald Trump announced on May 15 that India agreed to remove all tariffs on goods imported from the US.
Trump, while speaking at a event in Doha, Qatar on May 15, said, "It is very hard to sell in India, and they are offering us a deal where basically they are willing to literally charge us no tariffs," reported BBC.
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On April 2, 2025, which he dubbed as 'Liberation Day', Trump announced sweeping reciprocal tariffs on several countries. On imported goods from India, he had announced to impose tariffs up to 26 per cent. However, a week later, he announced to hold a 90-day pause to carry out negotiations with US trading partners.
The US is India's biggest trading partner, with total bilateral trade between the two countries reaching around $129 billion. According to Reuters report, India currently holds a trade surplus of $45.7 billion, which means it exported more to the US than it imported.
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Vinod Nair, Head of Research, Geojit Investments, said, "The market staged a robust rebound, closing with substantial gains, driven by a decline in domestic inflation and positive signals from the U.S. regarding a potential trade agreement with India. The benchmark index outperformed the broader market, buoyed by growing optimism around reduced operational costs and a potentially more accommodative monetary policy stance. Rate-sensitive sectors such as automobiles and real estate led the rally, supported by upbeat industry forecasts. Investor attention is now turning to the upcoming speech by the Federal Reserve Chair, which is anticipated to provide further clarity on the future policy trajectory, particularly in light of the recent easing in U.S. inflation data."
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Trade Tensions De-Escalate Across Globe
Recently, the United Kingdom (UK) and the US announced plans to reduce the tariffs they charge on each other. A similar trade truce was also agreed upon between the US and China. Meanwhile, India and the UK announced a Free Trade Agreement, putting an end to three years of negotiations.
The domestic market is factoring in these developments, as reflected in the movement of the headline indices. Over the past week, both the Sensex and Nifty have surged around 4.5% from their lowest point.
