- Sensex surged over 3,600 points to cross 85,000 and Nifty50 gained 1,200 points at opening on Tuesday
- Rupee strengthened 1.2 percent to 90.40 against the US dollar in early trade
- Markets and the rupee jumped after overnight news about a trade deal between India and the United States
Battered by the budget 48 hours ago, the markets swung violently the other way Tuesday morning after US President Donald Trump announced the long-pending India-US trade deal had been agreed.
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 Nifty50 gained 1,200 points from its Monday close of 25,088.40.
At opening all sectoral indices showed huge gains with realty, auto, consumer durables, and IT among the big movers, up 4.47 per cent, 3.78 per cent, 3.69 per cent, and 3.04 per cent, respectively.
By 10am both pared (very) early gains; the Sensex was over 2,200 points up and the Nifty 650.
Meanwhile, the rupee strengthened 1.2 per cent to 90.40 against the US dollar in early trade.
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 with the European Union.
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Prime Minister Narendra Modi and European Commission President Ursula von der Leyen both called it "the mother of all trade deals". In a statement on X the PM said two of the world's biggest democratic trading blocs – with trade valued at US$ 213 billion – had "sealed the biggest FTA in our history".
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, by a proposal to hike transaction taxes nominally to offset speculative trading.
The crash wiped out nearly Rs 10 lakh crore in investor wealth.
The Bombay Stock Exchange's 30-pack Sensex ended below 80,000, diving 1,546.84 points (1.88 per cent), in a market gripped by extreme volatility. And the National Stock Exchange's Nifty50 settled below 25,000, losing 495 points (1.96 per cent), with both marking their worst budget day in six years.
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And then last night Trump, in a Truth Social post, sent the markets haring the other way.
His post was followed by one from Prime Minister Modi, who conveyed his "big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement".
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Details have not been released yet - which has irked an opposition demanding clarity - but US ambassador to India Sergio Gor told NDTV US tariff on Indian goods will now stand at 18 per cent.
The earlier tariff imposed by Washington was an eye-watering 50 per cent, which included a 25 per cent 'penalty' on India for buying Russian crude oil despite sanctions by the US and other Western powers.
India's tariff rate is now lower than that of several major export-oriented Asian economies.
Bangladesh, Sri Lanka, Taiwan, and Vietnam have a 20 per cent tariff while imports from Indonesia, Malaysia, Thailand, the Philippines and Pakistan must pay 19 per cent.
With input from agencies
