Mumbai, Feb 3 (PTI) Stock market benchmark indices Sensex and Nifty ended 2.5 per cent higher on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent.

After starting the trade on a buoyant note, the 30-share BSE Sensex further jumped 4,205.27 points or 5.14 per cent to hit the day's high of 85,871.73. It later ended at 83,739.13, up 2,072.67 points or 2.54 per cent.

The 50-share NSE Nifty zoomed 639.15 points or 2.55 per cent to settle at 25,727.55. During the day, it surged 1,252.8 points or 4.99 per cent to 26,341.20.

India and the US have agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent from the current 25 per cent, US President Donald Trump said on Monday after a phone conversation with Prime Minister Narendra Modi.

From the 30 Sensex firms, Adani Ports surged 9.12 per cent.

The other prominent winners were Bajaj Finance, InterGlobe Aviation, Power Grid, Sun Pharma, Bajaj Finserv and Reliance Industries.

Tech Mahindra and Bharat Electronics were the only laggards.

The trade deal also propelled a sharp rally in textile, leather, gems and jewellery, seafood exports and specialty chemicals stocks.

"Indian equities experienced a significant rally today, driven by the long-anticipated India–US trade deal and a strengthening rupee, which boosted expectations of renewed FII inflows.

"The reduction of US tariffs on Indian goods from 50 per cent to 18 per cent enhances India's competitive position among emerging markets and bolsters the outlook for export-oriented sectors with high US exposure, such as textiles, aquaculture, gems and pharmaceuticals, which were supported in the 2026 Union Budget," Vinod Nair, Head of Research, Geojit Investments Limited, said.

In Asian markets, South Korea's Kospi rebounded sharply and jumped nearly 7 per cent. Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index also ended higher.

European markets were trading in positive territory.

US markets ended higher on Monday.

Foreign institutional investors offloaded equities worth Rs 1,832.46 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,446.33 crore, according to exchange data.

Brent crude, the global oil benchmark, dropped 0.65 per cent to USD 65.87 per barrel.

On Monday, the Sensex jumped 943.52 points or 1.17 per cent to settle at 81,666.46. The Nifty climbed 262.95 points or 1.06 per cent to end at 25,088.40. PTI SUM HVA

India-US trade deal cuts tariffs to 18%, sparking a sharp rally in Indian stocks and export-oriented sectors. India-US trade deal reduced the reciprocal tariff on Indian goods to 18 per cent, prompting a sharp rally in benchmark indices and export-oriented sectors-textiles, leather, gems and jewellery, seafood and specialty chemicals-supported by a firmer rupee and expectations of renewed foreign institutional investor inflows.