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Mumbai. Encouraged by the announcement of agreement on trade agreement between India and America, there was a huge surge in domestic stock markets on Tuesday. Benchmark index Sensex jumped 2,073 points, while Nifty jumped 639 points. Under the trade agreement, the US has agreed to reduce the 25 percent retaliatory duty imposed on Indian products to 18 percent.

Apart from this, America had also imposed an additional duty of 25 percent on continuing purchase of Russian oil. BSE’s benchmark index Sensex, based on 30 shares, jumped 4,205.27 points or 5.14 percent to reach a high of 85,871.73 points after the start of the trading session. However, later due to profit booking, it closed at 83,739.13 points with a gain of 2,072.67 points or 2.54 percent.

NSE’s 50-share standard index Nifty also closed at 25,727.55 points, up 639.15 points or 2.55 percent. At one time during trading, it had reached 26,341.20 points with a rise of 1,252.80 points or 4.99 percent. US President Donald Trump, after a phone conversation with Prime Minister Narendra Modi on Monday night, had said that the retaliatory duty on Indian goods will be reduced from 25 percent to 18 percent.

However, details of the agreement have not been revealed yet. Among Sensex companies, Adani Ports recorded the highest rise of 9.12 percent. Bajaj Finance, InterGlobe Aviation, Power Grid, Sun Pharma, Bajaj Finserv and Reliance Industries were also major gainers.

However, during this bullish period, shares of Tech Mahindra and Bharat Electronics closed with a decline. Shares of textiles, leather, gems and jewellery, seafood exports and specialty chemicals sectors witnessed a sharp rise on the news of the trade agreement. Vinod Nair, Head of Research, Geojit Investments Ltd, said, “India-US trade agreement and strengthening rupee have increased expectations of foreign institutional investment (FII) inflows.

Reduction in US duty from 50 per cent to 18 per cent has strengthened India’s competitive position in emerging markets and improved the outlook for export-oriented sectors.” Among other markets in Asia, South Korea’s Kospi jumped nearly seven per cent, while Japan’s Nikkei, China’s Shanghai Composite and Hong Kong’s Hang Seng also closed with gains. European markets were also trading with a positive trend.

American markets closed strongly on Monday. According to stock market data, foreign institutional investors sold shares worth Rs 1,832.46 crore on Monday, while domestic institutional investors bought shares worth Rs 2,446.33 crore. Meanwhile, global oil benchmark Brent crude fell 0.65 per cent to $65.87 per barrel. On Monday, Sensex rose by 943.52 points to 81,666.46 points and Nifty rose by 262.95 points to 25,088.40 points.

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