Rupee At 90.4 Per Dollar, Gains 1.2% After US Reduces Tariffs On Indian Goods

The rupee strengthened to 1.2% to 90.40 per dollar in early trading today as India's financial markets surged following a new trade agreement that reduced US tariffs on Indian goods from 50% to 18%. 

India's benchmark Nifty 50 index jumped nearly 5%, moving to within about 100 points of its record high set in January, while yields on the 10-year government bond eased by 5 basis points to 6.72%.

With these gains, the Nifty appeared headed for its strongest single-day performance in five years, and the rupee was poised for its best session since November 2022.

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The Sensex opened over 3,600 points in the green to cross 85,000 after having closed Monday at 81,666.46, and the similarly bruised Nifty 50 gained 1,200 points from its Monday close of 25,088.40.

India's stock markets have seen massive volatility over the past week, starting with the benchmark indices erasing overnight losses after a Free Trade Agreement - the "mother of all deals", Prime Minister Narendra Modi declared - with the European Union. The textiles sector responded particularly well, surging over 12 per cent, while automotives dropped four per cent.

That was followed by a frightening crash on Sunday with indices reacting badly to Finance Minister Nirmala Sitharaman's 2026 union budget speech. Markets crashed by nearly two per cent - alarmed, experts suggested, mainly by a proposal to hike transaction taxes on stocks.

The crash wiped out nearly Rs 10 lakh crore in investor wealth.

The 30-pack BSE Sensex ended below 80,000, diving 1,546.84 points (1.88%), in a market gripped by extreme volatility. NSE's Nifty50 settled below 25,000, losing 495 points (1.96%), with both indices marking their worst budget day in six years.

(With inputs from Reuters)