Mint Quick Edit | Investors cheered the US trade reset but does this mark a long-awaited market turnaround?

Overall, investors seem to have found a spring in their step after the leaders of India and the US announced revised terms of trade on Monday, with the latter hailing an imminent deal between the two countries. Does this mark a turning point for equities?

The end of uncertainty over bilateral relations may be enough to justify expectations of a recovery in foreign investor interest in Indian assets. A reduction in America’s tariff rate for goods made in India to 18% will clearly aid our exporters. But the sense had grown that capital flows could also be influenced by India’s perceived role in the US scheme of global affairs.

That’s not how globalization was supposed to work, but geopolitics has been proving hard to escape as the US takes an axe to old assumptions. While inflows into shares could plausibly see a turnaround, let’s not forget that stock prices ultimately track corporate earnings.