Markets rally after Trump cuts tariffs, Sensex jumps 2,500 points; Nifty gains 700 points

Mumbai (The Uttam Hindu): Indian equity markets witnessed a strong rally on Tuesday after US President Donald Trump announced a reduction in tariffs on India from 50 percent to 18 percent. Following the announcement, the Sensex surged by around 2,500 points (2.9 percent) to trade near 84,000, while the Nifty climbed nearly 700 points (2.9 percent) to hover around 25,800.

Buying interest was seen across realty, auto, and IT stocks, leading the market higher. With this sharp rise, the Sensex has fully recovered the 1,546-point fall recorded on the Budget day. Market sentiment improved significantly after confirmation of the India–US trade deal, which boosted investor confidence.

US President Donald Trump said on February 2 that the United States had agreed to a trade deal with India, under which tariffs would be reduced from 50 percent to 18 percent. As part of the agreement, India is expected to stop purchasing oil from Russia and increase imports of energy, technology, and agricultural products from the US.

Trump made the announcement on social media after a phone conversation with Prime Minister Narendra Modi. Earlier, in April, the US had imposed a 25 percent reciprocal tariff on India, followed by an additional 25 percent penalty tariff in August over India’s purchase of Russian oil.

According to a White House official, India will now face only an 18 percent tariff, as the US has decided to withdraw the 25 percent penalty linked to Russian oil purchases. This clarity over tariffs played a major role in lifting Indian stock markets.