Exciting news from America as Donald Trump has announced the reduction of tariffs on India. He shared this update on his Truth Social post, explaining how discussions with Prime Minister Narendra Modi included crucial topics such as ending the Russia-Ukraine war and enhancing India-US trade and energy cooperation. As part of the trade agreement, the tariff on India was being reduced from 25% to 18% effective immediately. This move offers relief for India's export sector and is anticipated to act as a trigger point for the Indian stock market, potentially resulting in a surge in Sensex-Nifty on Tuesday.
Gift Nifty Signals Positive Trend
The news of a tariff cut by the United States has also sparked a positive signal in the Indian stock market, with Gift Nifty surging rapidly following Trump's announcement. With a massive increase of 2.61%, or 665 points, Gift Nifty was trading at 25,751. Gift Nifty is often seen as an indicator of fluctuations in the Indian stock market.
Market Closed with a Remarkable Surge
The stock market saw an extraordinary spike on Monday, following initial volatility. Both Sensex and Nifty closed with impressive gains. The Bombay Stock Exchange's 30-share Sensex closed at 81,666.46, up 943.52 points or 1.17%. Similarly, the Nifty index witnessed a strong increase of 263 points, closing at 25,088.40.
Impact on Specific Sectors
The United States has historically been one of India's top export markets, and the tariffs had impacted exports. Trump's announcement of a tariff reduction could primarily benefit the shares of companies listed in the stock market that are export-oriented. These shares might open with strong gains.
Potential Surge in Specific Company Shares
For the Indian textile and garment sector, the US is a major export market, and the reduced tariffs could make Indian garments cheaper and increase orders for companies. This may result in growth for companies like Vardhman Textiles, Arvind Limited, KPR Mills, Trident, and Welspun India.
Moreover, the pharmaceutical sector is crucial among other export areas, and the tariff reduction will likely accelerate the export of medicines as their demand grows. Upon the market opening on Tuesday, stocks such as Sun Pharma, Dr. Reddy's, Cipla, Lupin, and Aurobindo Pharma might see significant boosts. Similarly, in the IT sector, shares of TCS, Infosys, Wipro, HCL Tech, and Tech Mahindra could experience an uplift.
Additionally, the auto components and EV sectors may see a rise due to increased exports, with companies like Bharat Forge, Motherson, and Sona BLW witnessing gains. The gems and jewelry sector companies, Titan and Kalyan Jewelers, may also benefit.
Praise for PM Modi and a Bold Claim
Donald Trump, in his post on social media, once again praised PM Narendra Modi, stating it was an honor to speak with India's Prime Minister today. He called Modi one of his closest friends and a powerful leader for his country.
Trump further claimed in his post that India has stopped purchasing oil from Russia and agreed to buy more from the United States and possibly Venezuela. Significantly, Trump announced the immediate India-US Trade Deal, thereby reducing the US tariff from 25% to 18%. Previously, the reciprocal tariff on India was 25%, which was later increased to 50% as an additional penalty related to purchasing Russian oil.
