Benchmark indices surged sharply on Tuesday after India and the US agreed on a trade deal, under which Washington will reduce reciprocal tariffs on Indian goods from 25 per cent to 18 per cent.

The 30-share Sensex jumped 2,072.67 points or 2.54 per cent to close at 83,739.13, logging its biggest single-day gain in eight months. During the session, it touched a high of 85,871.73, up 5.14 per cent. The NSE Nifty also climbed 639.15 points or 2.55 per cent to settle at 25,727.55, hitting an intraday high of 26,341.20.

Adani Ports led the gainers, rising 9.12 per cent, followed by Bajaj Finance, InterGlobe Aviation, Power Grid, Sun Pharma, Bajaj Finserv, and Reliance Industries. Tech Mahindra and Bharat Electronics were the only major laggards. Export-oriented sectors, including textiles, leather, gems and jewellery, seafood, and specialty chemicals, saw strong rallies.

Analysts said the trade deal, along with a strengthening rupee, boosted market sentiment and expectations of renewed foreign fund inflows. Mid and smallcap stocks also participated, supported by short-covering and risk-on sentiment.

Among sector indices, services, realty, and power led the rally, while metals, healthcare, and financial services also gained. A total of 3,304 BSE-listed stocks advanced, 981 declined, and 137 remained unchanged.

Asian markets, including South Korea, Japan, China, and Hong Kong, closed higher, and European markets were trading positively. Brent crude fell 0.65 per cent to USD 65.87 per barrel. Foreign institutional investors sold equities worth Rs 1,832.46 crore, while domestic investors bought Rs 2,446.33 crore.