India stocks notch best week in 3 months as US trade deal counters tech slide

Indian shares rose on Friday to end their best week in three months, as a long-awaited trade deal with the U.S. lifted a key overhang for markets, overpowering the budget-day drop and an ongoing global software selloff caused by fears of AI-led disruption.

The Nifty 50 rose 0.2% to 25,693.70, while the BSE Sensex added 0.32% to 83,580.40.

The blue-chip indexes climbed about 1.5% each in an extended week that kicked off with the federal budget on Sunday and wrapped up with a central bank meeting.

The Nifty’s trading range was the widest since early June 2024, when a weaker-than-expected majority for India’s ruling alliance had led to sharp market swings.

“While the budget triggered a dip in markets from the proposed derivatives tax hike and the RBI largely stayed on script, the U.S.–India trade deal came completely out of nowhere, catching markets off guard in a good way and clearing a major overhang,” said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.

U.S. President Donald Trump on Monday announced a trade deal with India that slashes tariffs on Indian goods to 18% from 50% in exchange for New Delhi halting Russian oil purchases and lowering trade barriers.

This came after shares tanked on Sunday, when India’s budget proposed hiking the securities transaction tax on derivatives, hitting investor sentiment.

As the week progressed, a new AI tool from Anthropic that automates tasks across legal, sales, marketing and data analysisfunctions, hit global software and data services stocks.

Indian IT exporters lost about $21 billion in market value this week, with the IT index falling 6.4% in its worst showing in four months.

Shares of Infosys, Tech Mahindra, TCS and HCLTech slid between 5.8% and 8.2%.

On Friday, the Reserve Bank of India kept the key repo rate unchanged as expected while acknowledging that external headwinds have intensified since the December 2025 meeting.

Foreign investors sold $19 billion worth of Indian stocks in 2025 and have sold another $3 billion so far this year.

Fourteen of the 16 major sectors logged weekly gains. The broader small-caps and mid-caps rose 0.4% and 1.8%, respectively.

Infrastructure firms rose 4.2% as New Delhi plans a record capital expenditure in the next fiscal year that starts April 1.

Among stocks, Adani Enterprises and Adani Ports jumped 10.2% and 9.2% on upbeat quarterly results.