Sensex and Nifty Surge Amid India-US Trade Agreement and FII Inflows

Indian equity markets experienced a notable upswing on Tuesday, with the Sensex climbing 2,072.67 points to close at 83,739.13, and the Nifty advancing 639.15 points to settle at 25,727.55. This surge was largely attributed to the recent trade agreement between India and the United States, which reduced reciprocal tariffs on Indian goods to 18% from the previous 25%.

The trade deal is expected to bolster India's export sectors, including textiles, gems and jewellery, and marine processing. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the agreement could lead to increased exports to the US, benefiting these industries.

Foreign institutional investors (FIIs) played a significant role in the market's rise, purchasing equities worth ₹5,236.28 crore on Tuesday. This marked the highest FII buying in over three months, indicating renewed confidence in the Indian market.

Market volatility also declined, with the India VIX slipping nearly 2% to 12.69, suggesting reduced uncertainty and improved risk appetite among investors.

Technical analysts observed that the Nifty index could see limited downside in the near term. Anand James, Chief Market Strategist at Geojit Investments Limited, mentioned that dips may be restricted to 25,600, while a move above 25,840 could lead to a test of the 25,923–26,020 zone.

Overall, the combination of the India-US trade deal and substantial FII inflows has significantly boosted investor sentiment, leading to a robust performance in the Indian stock markets.