India-US trade deal: After a long wait, the most-awaited India-US trade deal finally sees the light on Monday. The US President Donald Trump made an announcement in this regard, waiving the raciprocal 25% tariffs on India for buying crude oil from Russia and reducing the tariffs from 25% to 18%. This means Trump’s tariffs on India will come down from 50% to 18% after the implementation of the India-US trade deal.
According to stock market experts, this is a big development for the Indian economy and markets. They said that the stock market reflects the national economy and would discount the benefits first. So, we may see a gap-up opening on Tuesday, and the Nifty 50 index may soon break above the 25,500 hurdle. They also advised investors to look at export-oriented stocks in pharma, auto, IT, textile, gems and jewellery, etc.
India-US trade deal: How the Indian stock market may react on Tuesday?
Expecting a gap-up opening on Monday, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “The India-US trade deal is expected to make things clear for both DIIs and FIIs. It may signal a trend reversal in FIIs’ trading patterns, with them pausing selling in India and resuming buying in the China and South Korean markets. I am expecting a gap-up opening on Monday. Once a clear picture of Trump’s tariffs would come after the concrete information of the India-US trade deal is shared, both DIIs and FIIs are expected to become net buyers, a picture, which may fuel the key benchmark indices — Nifty 50, Sensex and Bank Nifty — to a new peak.”
Long-term impact of Trump’s tariff reduction
Expecting a trend reversal in the Indian stock market, Divam Sharma, Co-Founder & Fund Manager at Green Portfolio PMS, said, “The India-US trade deal is a massive positive, arriving just when we needed it most after a budget that prioritised tactics over populism. With valuations corrected and fundamentals rock-solid, this should draw FIIs back to Indian markets in the short term. A large chunk of US FII capital will likely shift here, viewing India as the premier strategic play among emerging markets. The current high pessimism? It’ll get trapped in a sharp rally fueled by short covering. DIIs and retail will pile in, amplifying flows from all sides—get ready for the upside!”
On segments that may benefit from the India-US trade deal, Divam Sharma said, “Key sectors that can benefit include textiles and apparel, auto ancillaries and engineering, speciality chemicals, agro and seafood exports, and select electronics and consumer manufacturers with US exposure. This aligns well with the recent budget, which clearly focuses on exports, manufacturing, and integrating India deeper into global supply chains.”
Stocks to buy today
On stocks to buy in the wake of the India-US trade deal and the reduction of Trump’s tariffs on India, Anuj Gupta, a SEBI-registered market expert, recommended 21 stocks to buy today from the auto, IT, pharma, textile, and defence sectors.
Pharma: Aurobindo Pharma, Cipla, and Glenmark Pharmaceuticals.
Defence: BEL, HAL, and Cochin Shipyard.
IT: TechM, HCL Tech, Wipro, and Infosys.
Textile: Trident and Welspun Living.
Auto and Auto Ancillary: Eicher Motors, Tata Motors, TVS Motor, Bajaj Auto, JBM Auto, Bosch, Amara Raja, Exide Industries, and UNO Minda.
Sensex, Nifty 50 outlook
Speaking on the outlook of Nifty 50 and Sensex today, Shrikant Chouhan, Head Equity Research at Kotak Securities, said, “We are of the view that now, 25,000/81,500 and 24,900/81,200 will act as immediate support zones for the bulls. Above these levels, a pullback formation is likely to continue, with the market potentially moving up to 25,250/82,200 or the 200-day simple moving average (SMA). Further upside could also push the market toward 25,350/82,500.”
Key Takeaways
- The reduction of tariffs under the India-US trade deal is expected to boost investor confidence in the Indian stock market.
- Key sectors likely to benefit include textiles, auto, pharma, and IT, making them prime targets for investment.
- Market experts foresee a potential rally, with the Nifty 50 and Sensex poised for upward movement.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
