Dalal Street Roars As India-US Deal Sparks Record Rally, Sensex Surges Over 3,600 Points; Nifty Jumps 4.8%

New Delhi: Dalal Street erupted in a massive relief rally today as the Indian equity benchmarks BSE Sensex surged over 2,300 points at the opening bell and the Nifty 50 reclaimed the 25,850 level in early trade. 

The explosive gains follow the historic announcement of the India-US trade deal, which has effectively dismantled a month-long "tariff wall" that had weighed heavily on investor sentiment.

The Nifty 50 index opened at 26,308.05, up by 1,219.65 points or 4.86 per cent, while the BSE Sensex jumped 3,656.74 points or 4.48 per cent to open at 85,323.20.  The markets opened on a strong positive note, exploding in positive territory amid improved global risk sentiment after the trade deal announcement.

'Game changer for Indian economy'

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said, “The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50 per cent to 18 per cent is a game changer for the Indian economy and stock markets.”  

He added, “The impact of the deal will be manifold: One, India's growth rate will rise to around 7.5 per cent in FY27 assisted by higher exports to the US. Two, corporate earnings already showing signs of revival in FY 27 can accelerate to around 16 to 18 per cent. Three, rupee will strengthen sharply.” 

Vijayakumar further said, “The combination of US-India trade deal, the EU-India trade deal and the growth-oriented Budget will boost the market sentiments and the animal spirits in the economy.” 

He noted that the stock market, anticipating and discounting these developments, will boom. 

"Technically, the market which is hugely short, will witness short-covering adding fuel to the rally. The rally will be widespread across market caps; but the large caps which are fairly valued have the potential to outperform aided by FII inflows," he said. 

According to him, "The FII favourites in large caps like the banking leaders, non-banking financials and other bluechips in telecom, capital goods and IT, will surge. Textile stocks will be on special focus. This is going to be the beginning of a boom in the Indian stock markets taking it to new records."

Nifty 100 rose nearly 4 per cent

In the broader market on the NSE, the Nifty 100 rose nearly 4 per cent, the Nifty Smallcap index surged 4.6 per cent, while the Nifty Midcap index gained 4.05 per cent. 

Among sectoral indices, Nifty Auto jumped 5 per cent, Nifty IT gained 5.85 per cent, Nifty FMCG rose 1.8 per cent, Nifty Metal surged 3.88 per cent, Nifty Pharma climbed 4.27 per cent, and Nifty Consumer Durables advanced 4.25 per cent. 

Vedanta shares gained 3.38 per cent to Rs 683, while Hindustan Zinc shares rose 2.8 per cent to Rs 627.

Why this surge

The cheer in the Markets followed US President Donald Trump's announcement of a trade deal with India, months after imposing 50 per cent tariffs on Indian goods in August 2025. 

The agreement, unveiled on Trump's social media platform Truth Social, features significant tariff reductions and includes claims that India would halt purchases of Russian oil. 

Trump had earlier levied a 50 per cent tariff on India, with 25 per cent linked to crude imports from Russia, as administration officials repeatedly alleged that India's oil purchases helped finance Russia's war against Ukraine.
 

Key Market Drivers

The Indian market's massive rally is being fueled by three critical pillars that have fundamentally shifted investor sentiment. First, the "Tariff Reset" has eliminated a significant economic overhang, as the reduction of US duties from 50% to 18% and the removal of the 25% "Russian oil penalty" are seen as transformative for India's fiscal stability and export competitiveness. 

This newfound clarity is expected to trigger a major reversal in FII inflows; after being net sellers throughout a volatile January, foreign institutional investors are poised to return in force, viewing the deal as a green light for global capital to re-enter Indian assets. 

Finally, this surge in confidence is reflected in the currency's strength, with the Indian Rupee staging its sharpest rally in months to trade in the 90.15–90.40 range against the US Dollar, supported by the prospect of robust trade flows and a stabilized macroeconomic outlook.

Top Sectoral Gainers 

The rally was broad-based, with export-oriented sectors leading the charge.

IT Services: Stocks like Infosys (up 4.3%) and Wipro (up 6.8%) surged as trade friction eased.

Textiles & Gems: Companies like Welspun Living and KPR Mill saw double-digit gains, as their products now become significantly cheaper in the American market.

Auto & Engineering: Bharat Forge and Tata Motors gained over 4% on expectations of better order flows from North America.

Gold Rates

Meanwhile, gold prices on MCX surged around 2 per cent on Tuesday to Rs 1,47,355 per 10 grams (24 kt), while silver prices jumped by Rs 14,175 or 6 per cent to Rs 2,50,436 per kg at the time of filing this report.