Following Trump's announcement of reduced tariffs on India to 18 per cent, the Indian rupee appreciated sharply against the US dollar on Tuesday. Rupee,
the worst performing asian currency in the last year, appreciated by over 1 per cent against the US dollar in early trade, rising to levels of 90.40. Indian equity benchmarks, Nifty50 and BSE Sensex, also opened sharply in trade on Tuesday. Both indices rallied over 2 per cent, with the Sensex rising over 2,300 points and the Nifty50 soaring over 700 points. Foreign Institutional Investors (FIIs) unwinding short positions played a central role in Tuesday’s strong market rally. The upswing was reinforced by technical triggers as traders hurried to unwind bearish bets, with short positions estimated to be close to 90 per cent. During the session, the Nifty rebounded from oversold levels and moved back above the 26,000 mark. Anand James, Chief Market Strategist at Geojit Investments, said the index’s strong close above 25,000 on Tuesday has opened the door for a move towards the 25,800 mark, with a scope for a further rise to 26,200. He added, however, that if Nifty fails to hold above 25,800, it could slip into a consolidation phase within the 25,430 to 25,340 range, as reported by Times of India. Large-cap stocks spearheaded the rally, as blue-chip counters powered the benchmark indices higher. Shares of Reliance Industries climbed nearly 4 per cent, while Adani Ports surged above 8 per cent, delivering a strong boost to the indices. Major stocks, including HDFC Bank, L&T, Bajaj Finance, Eternal, ICICI Bank, and Infosys, also imitated the upbeat mood, gaining as much as 5 per cent. The Union Budget 2026 also supported the rally as it emphasised capital expenditure, which lifted expectations to healthier order flows and clearer earnings prospects across sectors. Also Read: How Does the US Cutting Tariffs to 18% Change India’s Standing Against China and Other Export Rivals?
