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India Stocks Poised for Gains After US Trade Pact
3 Feb
Summary
- US-India trade deal reduces tariffs, removing a key concern.
- Foreign investors expected to return, boosting Indian equities.
- Budget and trade pact signal improving investor confidence.
Indian equities are poised to outperform Asian peers after a crucial trade agreement was reached between New Delhi and Washington. This accord, announced recently, eases reciprocal tariffs and removes a significant overhang that had previously pressured the nation's financial assets and led to substantial foreign outflows.
The agreement is viewed by fund managers as a catalyst for renewed global investor interest in Indian equities, which experienced their worst January since 2016. The positive development is expected to support the rupee, which had recently seen a series of record lows. Early market indicators, such as Nifty 50 futures surging, suggest an optimistic outlook for the upcoming trading sessions.
This trade deal's finalization, coming shortly after a supportive budget announcement, reinforces early signs of improving investor confidence. While some challenges remain, including mixed earnings reports and clarity needed on purchase commitments, the overall sentiment is constructive, with expectations of reversed foreign outflows and a stronger Indian currency.
