Textile and shrimp shares rise to 8%. Is the US-India trade deal finally happening?

Shares of export-reliant textile and shrimp companies witnessed renewed buying on Thursday, rising up to 8% on rising hopes of an India-US trade deal. On the sidelines of the World Economic Forum in Davos, US President Donald Trump told Moneycontrol that Washington will have a “good deal with India”, adding that he has great respect for Prime Minister Narendra Modi.In today’s session, shares of shrimp pack Avanti Feeds rose 8% to a day’s high of Rs 807 per piece on the BSE, while Apex Frozen Foods rose 5% to a day’s high of Rs 277 per share. Coastal Corporation also rose 5% to a high of Rs 43.20 per share. Waterbase shares rose 3% to Rs 42 per share.

Among textile stocks, Gokadas Exports rose 6% to the day’s high of Rs 596 per share. Pearl Global Industries gained 3% to a high of Rs 1,480 per share on January 22. Weslspun Living also gained 8% to trade at Rs 126.50 per share.

Sentiment among these export-heavy stocks was boosted by renewed optimism around a possible India-US trade deal after US President Donald Trump struck an upbeat tone on bilateral ties during his visit to the World Economic Forum in Davos.

Speaking to Moneycontrol on the sidelines of the WEF, Trump praised Prime Minister Narendra Modi and expressed confidence in a favorable deal, saying, “I have great respect for your Prime Minister. He is a wonderful man and a friend of mine. We are going to make a good deal.” His comments came even as the US continues to impose tariffs of up to 50% on Indian goods, among the highest India faces globally, and as a comprehensive trade deal remains elusive.

Despite the rate overhang, investors are also taking comfort in consistent signals that negotiations are still ongoing. Earlier this month, newly appointed US Ambassador to India Sergio Gor took charge and expressed strong support for the ongoing trade negotiations. He said both countries are committed to reaching an agreement. Comments indicate that expectations for progress have been strengthened and risk appetite for Indian equities has been supported.

Also read: Rs 19,000 crore FII sell-off: Banks, IT, FMCG worst hit. Only bright spot for metals The proposed pact, if concluded, could revive trade ties between Washington and New Delhi, which had cooled following Trump’s earlier decision to impose steep tariffs on Indian goods – 20% of which were fines aimed at what he claimed was Indian financing of the war in Ukraine.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)