Indian equity benchmarks open higher on resurgent foreign flows, buoyed by US trade pact optimism

Indian equity markets opened on a positive note on Tuesday with key indices trading higher, reflecting renewed foreign investor interest following the recent trade agreement between India and the United States. The sentiment shift marks a notable turnaround after months of foreign selling.

At the start of trading, the benchmark Nifty 50 was up 0.3 percent at 25,955 points, while the BSE Sensex rose around 0.35 percent to 84,361 levels. Both indices have advanced more than 3 percent over the past six sessions since New Delhi and Washington formalised the long-awaited trade framework that aims to reduce tariff barriers and broaden economic cooperation.

Market participants pointed to a noticeable return of foreign portfolio investments (FPIs) as a key supporting factor. According to provisional data, FPIs bought Indian equities worth ₹22.55 billion (approximately $248.6 million) on Monday. Cumulative foreign inflows in February have reached about $1.3 billion, breaking a three-month streak of net selling.

Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, said investor confidence was improving as the trade deal reduced uncertainties that had weighed on sentiment. The greater willingness among investors to take on risk in broader market segments was evident early in the session.

The gains were not confined to headline indices. Broader market categories also posted positive movement. The small-cap index rose around 0.6 percent and the mid-cap index gained about 0.2 percent; both have delivered solid returns over the recent trading run.

Sector performance was largely positive, led by auto and metal counters. Among individual stocks, the exchange operator BSE posted a near 6 percent surge after reporting higher transaction revenue, while industrial machinery maker ISGEC Heavy Engineering jumped about 18 percent after delivering strong quarterly results. On the downside, Texmaco Rail & Engineering edged lower on a weaker profit print for the December quarter.

Regional and global market cues added to the upbeat mood. Broader Asian equities strengthened, supported by a sharp rally in Japanese markets after recent political developments there.

This early session strength suggests the market may be entering a phase of renewed risk appetite, driven by cross-border investment flows and stabilising macro signals.