Post Session: Quick Review

Indian equity benchmarks have recorded one of their sharpest single-day gains on Tuesday, with both Nifty and Sensex closing over 2.5% higher amid broad-based buying across sectors. Markets witnessed a massive gap-up opening and maintained strong momentum throughout the session after U.S. President Donald Trump announced an immediate reduction in reciprocal tariffs on Indian goods to 18 percent from 25 percent.

Some of the important factors in trade:

US agrees to cut reciprocal tariffs on Indian goods to 18%: Sentiments remained upbeat after US President Donald Trump, following a phone conversation with Prime Minister Narendra Modi, said that India and the US have agreed to a trade deal under which Washington will reduce reciprocal tariffs on Indian goods to 18 per cent from the current 25 per cent.

Govt actively conducting inter-ministerial discussions to enhance FDI in PSBs: Traders took some support as Financial Services Secretary M Nagaraju has said that the Finance Ministry is actively conducting inter-ministerial discussions to enhance foreign direct investment (FDI) in public sector banks (PSBs) from the current 20 per cent to 49 per cent, to strengthen their capital base. 

India to achieve 4.3% fiscal deficit target for FY27: Traders took note of S&P Global Ratings’ statement that it is confident that the government will achieve its 4.3 per cent fiscal deficit target for FY27, despite a projected dip in goods and services tax (GST) receipts following the rate streamlining in September 2025.

On the global front: European equity markets were trading mostly in the green as investors cheered data showing that French inflation unexpectedly eased to a five-year low last month, raising further possibility that eurozone inflation could be below the European Central Bank's target for longer this year. Asian markets ended mostly in the green after the Reserve Bank of Australia raised its benchmark policy rate for the first time in two years and signalled that another move could be on the table to curb higher inflation.

The BSE Sensex ended at 83739.13, up by 2072.67 points or 2.54% after trading in a range of 83501.22 and 85871.73. There were 28 stocks advancing against 2 stocks declining on the index. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 4.79%, Power up by 4.14%, Utilities up by 3.92%, Capital Goods up by 3.71% and Industrials up by 3.44%, while there were no losing sectoral indices. (Provisional)

The top gainers on the Sensex were Adani Ports and Special Economic Zone up by 9.12%, Bajaj Finance up by 6.68%, Interglobe Aviation up by 5.51%, Power Grid Corp up by 4.85% and Sun Pharma up by 4.63%. On the flip side, Tech Mahindra down by 0.57% and Bharat Electronics down by 0.02% were the only losers. (Provisional)

Meanwhile, the Finance Minister Nirmala Sitharaman has said that the Union Budget 2026-27 prioritized investments in order to boost consumption, and the trajectory of fiscal deficit shows that the government’s priority is growth. Further, the Budget has pegged fiscal deficit at 4.3% of GDP for the next fiscal year, as against 4.4% for the financial year ending March 2026, continuing the path of fiscal consolidation. She noted that the fiscal deficit target has to depend on each year’s economic situation and in the past the government has pegged fiscal deficit a couple of basis points lower than the previous fiscal year. 

Meanwhile, she has defended hike in securities transaction tax (STT) on F&O trades saying the hike will act as a deterrence so that people do not go headlong in speculative. The Budget has proposed an increase in STT on futures contracts to 0.05% from 0.02%. STT on options premium and exercise of options are proposed to be raised to 0.15% from the present rate of 0.1% and 0.125%, respectively. Further, the minister talked about volatile gold prices, she said that volatility in gold prices is due to global uncertainty, and many central banks are investing in gold. She added that investors rushing to buy gold shows, they do not have confidence in any one particular currency. 

The minister also said that the pace of disinvestment and asset monetisation will continue. The government will encourage more disinvestment of public sector companies. She added that IDBI Bank strategic disinvestment on track, pace of PSU stake sale to set direction of non-tax revenues. Meanwhile, she expressed confidence that the recent higher private consumption, which was driven by GST rate cut and hike in Income Tax exemption limit in FY26 Budget, will sustain in coming months.

The CNX Nifty ended at 25727.55, up by 639.15 points or 2.55% after trading in a range of 25641.30 and 26341.20. There were 47 stocks advancing against 3 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Enterprises up by 10.38%, Adani Ports and Special Economic Zone up by 9.10%, JIO Financial Service up by 8.11%, Bajaj Finance up by 6.72% and Interglobe Aviation up by 5.53%. On the flip side, Tech Mahindra down by 0.44%, Bharat Electronics down by 0.03% and Nestle down by 0.02% were the few losers. (Provisional)

European markets were trading mostly in green; Germany’s DAX gained 186.48 points or 0.75% to 24,984.00 and France’s CAC rose 19.33 points or 0.24% to 8,200.50, while UK’s FTSE 100 decreased 5.01 points or 0.05% to 10,336.55.

Asian markets settled higher on Tuesday, tracking Wall Street’s gains overnight and easing trade tensions after US President Donald Trump reached a trade deal with India that lowers tariffs and shifts Indian oil purchases away from Russia. The Kospi average soared due to bargain hunting following the previous day's plunge. Japan’s Nikkei surged amid strong earnings from the technology and finance sectors, and as polls showed Prime Minister Sanae Takaichi's party is headed towards a landslide victory in the House of Representatives election on Sunday. Chinese shares rallied, supported by stabilized sentiment in global metals markets and positive economic signals from both domestic manufacturing data and strong US factory activity.