US-India Trade Deal: Indian ADRs Soar Up to 6.75% on Wall Street; Sensex, Nifty Set for Strong Rally

Indian American Depositary Receipts (ADRs) listed on Nasdaq and the New York Stock Exchange witnessed a sharp surge on Monday after a major US-India trade announcement. The US government agreed to reduce the reciprocal tariffs on Indian goods from 50% to 18%, marking a significant improvement in bilateral trade relations.

The move comes as a relief to markets, easing months of trade tensions that had weighed on investor sentiment. With Indian markets set to open later in the day, the reduction in tariffs is expected to fuel optimism and push the benchmark indices higher.

Market Performance

Indian ADRs rallied strongly on Wall Street, reflecting the global response to the trade deal:

• Wipro ADR surged by 6.75%
• ICICI Bank ADR climbed 4.95%
• Infosys ADR gained 4.32%
• HDFC ADR increased 4.35%
• Dr. Reddy’s ADR rose 1.42%

Meanwhile, GIFT Nifty, a US-dollar-denominated derivative based on India’s flagship index Nifty 50, rose 2.87% to 25,857. This points to a likely strong start for Indian markets at the open.

Key Highlights of the Trade Deal

The US-India trade deal represents a major easing in trade relations after a period of high tariffs and restrictions:

• The US had imposed a 50% duty on many Indian goods last year.
• Additional 25% tariffs had applied to India’s import of Russian oil, making Indian goods among the most heavily taxed.
• The reduction to 18% marks a significant drop and signals smoother trade ties.

This development is seen as a milestone in bilateral economic relations, reversing the high-tariff environment that had affected trade flows and investor sentiment over the past months.

Indian Markets Set for Rally

Indian markets are expected to open on a positive note following global cues:

• Sensex and Nifty are poised for gains, building on strong overseas momentum.
• On Monday, Sensex ended 1.42% higher, reclaiming over half the losses from the Union Budget-driven sell-off.
• Investors are focusing on the trade deal as a major sentiment booster, particularly for export-oriented sectors.

The rally in ADRs and derivative markets signals strong overnight investor confidence, indicating that Indian equities may see robust activity today.

Company Impact

The trade deal had a direct impact on leading Indian firms listed in the US:

• Wipro and Infosys showed significant gains, reflecting renewed optimism in IT and software exports.
• ICICI Bank and HDFC recorded solid increases, highlighting investor confidence in financial sector exposure to global trade.
• Dr. Reddy’s saw moderate gains, illustrating steady interest in pharmaceutical exports.

These movements underline the immediate market reaction and highlight the potential ripple effect across other export-oriented and manufacturing sectors once Indian markets open.

Summary

The US-India trade deal has delivered a clear message to global markets. The reduction of reciprocal tariffs from 50% to 18% has spurred strong gains in Indian ADRs on Nasdaq and NYSE, setting the stage for a likely positive session in domestic markets.

• Indian ADRs jumped up to 6.75%, led by Wipro and ICICI Bank.
• GIFT Nifty points to a near 3% higher opening for Nifty 50 futures.
• Sensex and Nifty are expected to benefit from renewed investor optimism and easing trade tensions.

With bilateral trade relations improving, the markets are signaling a fresh wave of optimism, particularly for sectors directly tied to exports. Today’s session could mark one of the more decisive rebounds for Indian equities in recent months.

Source: Indian Express