India’s financial markets surged on Tuesday as news of a new U.S.–India trade agreement lifted investor sentiment and bolstered stocks and the rupee.

Thr accord, which includes significant U.S. tariff cuts on Indian goods in exchange for New Delhi halting imports of Russian oil, triggered a sharp relief rally across equities and currency markets.

The Indian rupee strengthened against major peers and benchmark indexes climbed, reflecting renewed confidence in trade prospects and economic linkages.

Traders said the deal highlighted improving U.S.–India commercial ties and potential for expanded market access.

Equities gained across major sectors, with export‑oriented and manufacturing stocks among the notable performers. Market participants said improved trade terms could enhance profitability forecasts for firms dependent on foreign demand.

Investors also credited domestic policy stability and strong corporate earnings expectations with supporting the rally. Optimism around near‑term growth prospects boosted sentiment in both blue‑chip and mid‑cap segments.

Currency markets reacted favourably, with the rupee appreciating as capital flows responded to improved trade sentiment and macro outlook. The move contrasted with broader emerging market pressures seen earlier this quarter.

Analysts cautioned that while the trade deal offers positive momentum, external risks — including geopolitical tensions and commodity volatility — remain influential for India’s growth narrative in 2026.

Source: Reuters.