Source: Reuters
The Indian equity market surged on Tuesday, fueled by a landmark trade agreement between India and the United States. Adani Group shares led the charge, with flagship Adani Enterprises and Adani Ports recording double-digit gains as investor sentiment shifted from caution to aggressive buying.
The rally comes at a pivotal moment, as several groups are scheduled to report their December-quarter earnings today.
A New Chapter in India-US Trade Relations
The primary catalyst for this market euphoria was the announcement from Washington that the U.S. would significantly lower reciprocal tariffs on Indian goods. Under the new deal, tariffs will drop from 50% to 18%.
The agreement, announced by U.S. President Donald Trump after a high-level meeting with Prime Minister Narendra Modi, is expected to provide a significant boost to Indian exporters and infrastructure giants.
Adani Enterprises and Adani Ports Lead the Pack
Adani Group companies emerged as the biggest beneficiaries of the news:
- Adani Enterprises: The stock soared 11.93%, hitting an intraday high of ₹2,233.40. This marks a 14% climb over the last two trading sessions.
- Adani Ports & SEZ: Shares rose 8.33% to ₹1,520, benefiting from expectations of increased maritime trade and logistics demand.
- Other Gainers: Adani Power and Adani Energy Solutions also saw significant buying interest, with analysts pointing toward strengthened energy trade linkages between the two nations.
Brokerage Outlook: Why Experts are Bullish
Global and domestic brokerages have been quick to validate the rally. Jefferies listed Adani Group companies among the top winners of the new trade regime. Similarly, domestic firm Antique highlighted Adani Power and Adani Ports as strategic plays for those looking to capitalise on deeper bilateral economic ties.
“The reduction in tariffs opens up a massive corridor for infrastructure and energy players who have the scale to meet U.S. demand,” noted a market analyst.
Steering Regulatory Headwinds
The surge provides a much-needed breather for the group, following recent legal developments in the U.S. Billionaire Gautam Adani and his nephew Sagar Adani recently agreed to accept service of legal papers from the U.S. Securities and Exchange Commission (SEC).
While the civil fraud lawsuit regarding investor disclosures remains a point of observation for the markets, the current “Joint Stipulation” filed in a Brooklyn federal court is considered a standard procedural step. For now, the sheer scale of the India-US trade deal has outweighed regulatory concerns for most investors.
Broader Market Context
The Adani rally didn’t happen in a vacuum. The entire Indian market breathed a sigh of relief, with the Sensex jumping over 4,200 points and the Nifty climbing 5% to hit 26,341.20.
