Dalal Street blows 'Trump'et with 2000-point salute to trade deal

MUMBAI: Two social media posts on Monday night—one by US President Donald Trump and the other by Prime Minister Modi—left Indian investors richer by a massive Rs 12 lakh crore a day later. The spurt in investors’ wealth—the fifth biggest single-day gain in history—came on the back of a stock market rally that pushed sensex up by 2,073 points to close at 83,739 points.

Late on Monday, Trump said on Truth Social that after a call with Modi, a US-India trade deal—that was stalled for months due to various reasons—was finally settled. A post by the Indian PM on X (formerly Twitter) followed, confirming about the trade deal.

The feel-good rally that followed lifted sensex by nearly 4,200 points (5.2%) in early trades but soon profit booking at higher levels pulled it down a bit. After a steady session, sensex closed 2.5% up. On the NSE, Nifty too treaded a similar path and closed 639 points (2.6%) up at 25,728 points.

According to A Balasubramanian, MD & CEO, Aditya Birla Sun Life Mutual Fund, the announcements about the India-US trade deal removed a key overhang for Indian markets. “Coming on the heels of a strong Budget, it materially improves visibility on capital flows, the rupee, and manufacturing investment.”

The current deal sharply improves India’s relative competitiveness as a China-plus-one destination, Balasubramanian said. “The resolution (of trade-related differences between India and the US) is likely to reverse foreign outflows, support the rupee, and unlock nearly $100 billion of deferred investment. For investors, the bigger signal is predictability: Businesses can pivot from tariff risk to execution and capacity building.”

Foreign funds were at the forefront of Tuesday’s buying on Dalal Street with the net inflow in stocks at Rs 5,236 crore, BSE data showed. The rally lifted BSE’s market capitalisation (that also represents investors’ wealth) to Rs 467.1 lakh crore, up by Rs 12.1 lakh crore. Reliance Industries, along with HDFC Bank, ICICI Bank, Bajaj Finance and SBI contributed the most to the day’s four-figure gain in sensex which was its biggest single-session gain in more than seven months.