Mumbai, Oct 23 (PTI) Equity benchmark indices Sensex and Nifty surged in early trade on Thursday amid growing optimism on the US-India trade deal front.

Fresh foreign fund inflows and buying in IT stocks also drove the markets higher during the initial trade.

The 30-share BSE Sensex jumped 734.36 points to 85,160.70 in early trade. The 50-share NSE Nifty surged 198.3 points to 26,066.90.

From the Sensex firms, Infosys, HCL Tech, Tech Mahindra, Axis Bank, Hindustan Unilever and Kotak Mahindra Bank were among the gainers.

However, Eternal and Bajaj Finserv were the laggards.

"Reports of an imminent trade deal between India and US is doing the rounds in market circles and the market reaction through Nifty implied open confirms this. The market rally which has already begun in the festival season will accelerate enabling the Nifty to set new record highs.

"Unprecedented record sales during the last few days has the potential to improve corporate earnings. FIIs turning buyers recently and short covering are factors that can fuel the rally. Clearly, it is advantage bulls!," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

In Asian markets, South Korea's Kospi traded higher while Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng quoted lower.

US markets ended in negative territory on Wednesday.

Foreign Institutional Investors (FIIs) bought equities worth Rs 96.72 crore on Tuesday, according to exchange data.

"Dalal Street kicked off Samvat 2082 on a jubilant note, with the Sensex and Nifty marking their fifth straight day of gains during the Mahurat trading session. The mood remains buoyant as the US reportedly plans to slash tariffs on Indian imports to just 15–16 per cent — a game-changing move that could supercharge India's trade competitiveness and exports," Prashanth Tapse, Senior VP (Research), Mehta Ltd, said.

Global oil benchmark Brent crude jumped 2.56 per cent to USD 64.19 a barrel.

Equity markets were closed on Wednesday on account of Diwali Balipratipada.

In a special one-hour Muhurat trading session on Tuesday, the Sensex rose by 62.97 points or 0.07 per cent to settle at 84,426.34. The Nifty went up by 25.45 points or 0.10 per cent to settle at 25,868.60. PTI SUM HVA

Sensex and Nifty rose as reports of a US India trade deal and foreign fund inflows boosted market buying. Equity benchmarks rallied as reports of a prospective US-India trade deal and fresh foreign fund inflows drove buying in IT and select financial stocks, lifting the Sensex and helping Nifty regain the 26,000 level; commentators cited tariff reductions improving trade competitiveness, festival-season sales, short-covering and recent FII purchases as key drivers while global cues were mixed.