Positive signals around a trade deal between India and the US have triggered a sharp rally in the Indian stock market. Electronics manufacturing companies, in particular, witnessed strong buying, giving investors returns ranging from 10% to 20% in a short span.

Market Sentiment Turns Bullish

For months, investors were worried about US tariffs on Indian exports. However, news of tariff reductions and the possibility of a trade agreement has revived market confidence. The sentiment was further supported even after the Budget Day rally on February 3, as buying activity remained strong across several stocks.

Top Gainers in Electronics Manufacturing

• Avalon Technologies: Surged 20%, hitting Rs 1,022 and locking the upper circuit—its highest level in two months.

• Syrma SGS Technology: Rose nearly 11%, crossing Rs 800.

• Dixon Technologies: Up by 7%.

• Kaynes Technology: Jumped 8%.

• Other notable gainers included Amber Enterprises and PG Electroplast, trading at day-high levels.

Why Stocks Soared

The US tariff relief on Indian goods is the primary driver. US President Donald Trump indicated tariffs on Indian imports have been reduced to 18%, making it easier for Indian companies to compete in the US market. This has strengthened confidence in potential export growth.

Why the EMS Sector Benefits Most

Experts say the electronics manufacturing services (EMS) sector will gain the most. With reduced tariffs, India can strengthen its position in smartphone assembly, semiconductor packaging, and electronic component manufacturing. Combined with the PLI scheme and global supply chain shifts, India could benefit more than China and other Asian countries. This provides opportunities for both large EMS companies and smaller suppliers.

Investor Takeaway

The trade deal signals relief for investors after a prolonged period of market pressure. Although the Indian stock market underperformed Asia in 2025, prospects are improving. Experts caution against hasty investments based solely on momentum and recommend focusing on companies with strong fundamentals and a long-term growth outlook.