Tuesday morning can prove to be a great morning for Indian stock market investors. The mood of the market has completely changed after US President Donald Trump announced the much-awaited trade agreement with India. As soon as this news came, a strong rise was seen in Gift Nifty and it jumped by about 600 points i.e. 2.4% and reached the level of 25,374. This rise in GIFT Nifty may lead to heavy buying and big surge on Dalal Street on Tuesday.
What is the new deal between Trump and Modi?
The real reason for this rise is the agreement, information about which was given by Donald Trump on his social media platform ‘Truth Social’. Trump said that he had talked to Prime Minister Narendra Modi and both the countries have agreed to ease trade. Under the new agreement, the US will reduce the ‘reciprocal tariff’ on Indian goods from 25% to 18%. In return, India will also move towards reducing tariff and non-tariff barriers on American products to ‘zero’.
Why Jhuma Bazaar?
This news is like a lifesaver for the market. The market was under pressure for some time due to uncertainty regarding the trade deal and Nifty had fallen by 1,000 points in the month of January. Foreign investors were continuously withdrawing money. Market experts have described this deal as beneficial for both the countries. He says that even though the specifics of the agreement are yet to be revealed, it has removed the sword of uncertainty hanging over the rupee and equity markets.
Which sectors will benefit the most?
Analysts believe that due to reduction in tariff, sectors dependent on exports are going to be benefited. Textile and fishery stocks, which were till now under pressure due to high US tariffs, will emerge as the biggest beneficiaries of this agreement. Besides, this will also help in curbing the weakness in the rupee, which will further strengthen the market sentiment.
