After a disappointing market performance post-Budget announcement, the Indian share market jumped, with the benchmark indices posting sharp gains in early trade.
As the markets closed for the day, Nifty 50 settled 2.55 per cent higher at 25,727.55 points, while the BSE Sensex gained 2.54 per cent to 83,739.13, to log its strongest single-session rise since May 2025.
What caused the spike?
The surge can be attributed to the announcement made by US President Donald Trump to slash the tariffs on Indian goods to 18 per cent in exchange for New Delhi halting Russian oil purchases and lowering trade barriers.
Index heavyweight Reliance Industries jumped 3.4 per cent. Top private lenders HDFC Bank and ICICI Bank rose 2.2 per cent and 2.7 per cent, leading the benchmark rally.
The day also saw the rupee strengthening against the dollar, its best day in 7 years, after a long-awaited US-India trade deal boosted market sentiment.
Gold and silver prices rose sharply on Tuesday, with gold set for its biggest daily rise since November 2008, as investors snapped up the metals following their steepest two-day slump in decades.
European shares too climbed to a record high on Tuesday as the global commodity market rout showed signs of stabilising.
What to expect:
Market analysts believe the trade deal was a great boost to the market, but one must be cautious.
"We believe the trade deal is a great boost for the sombre market sentiment; but one must remember that exports to the US are a small part of our $4-trillion economy. Thus, even though the deal will boost sentiment in the short-term, one must not expect miracles out of it. The market is expected to rally on short covering. But we must look for a fresh long build-up for the trend to sustain," said Apurva Sheth, head of market perspectives and research at SAMCO Securities to Business Standard.