Dalal-Steet likely to cheer trade deal progress

MUMBAI: With the US-India trade deal taking another major step towards closure, Dalal Street investors are expecting a positive opening for the leading indices on Monday. Gift Nifty, used by traders for short term market direction, closed 0.7% up on Saturday, which is providing confidence to investors about a higher opening for the week.

On Friday, after a soft opening and then sliding in to the red zone, sensex closed 266 points up at 83,580 points. The late recovery was on the back of expectations of constructive developments relating to the India-US trade agreement.

Early on Saturday, the two countries jointly came out with a statement about agreeing on some areas of bilateral trades. In addition to lower tariffs, India could also gain from higher exports to the US and more employment because of expanded exports, analysts said.

This also has the potential for more foreign flows, market players said.

According to VK Vijayakumar, chief investment strategist, Geojit Investments, during the past week, the Budget and the news about the India-EU trade deal, and the much-awaited India-US trade deal had a major impact on the market. "The market reacted negatively to the hike in STT on F&O trades but smartly recovered on news of the US-India trade deal." Early signs show a marked change in foreign fund flows during the current month. During the first week of the month, net buying by foreign funds was Rs 8,129 crore, data from NSDL showed. In the previous month they had withdrawn close to Rs 36,000 crore from the market.

An important factor that changed the market sentiment was the appreciation in rupee from a record low of 91.72 to the dollar to 90.30, Vijayakumar said. Even though rupee weakened again to close the week at 90.70, the currency is expected to stabilise and gradually appreciate to below 90 to the dollar by end March 2026, he said. "This has the potential to trigger more (foreign) inflows into India. However, a lot will depend on how the AI trade pans out."