Sensex closed Monday's session with a strong gain of nearly 700 points, ending near 83,400, while Nifty50 settled above 25,770, gaining 200 points as of 3:30 PM. According to ABP Live, both benchmarks opened the day in green, with Sensex nearing 83,400 and Nifty crossing 25,750 in early hour trading. This represents a substantial recovery from earlier volatility, as GIFT Nifty futures had surged over 300 points on late Friday, February 20, signalling a strong opening for Indian equities following the US Supreme Court decision. The rally in domestic equities mirrored broader strength in Asian markets, where Hong Kong's Hang Seng surged 649 points to 27,063 and Taiwan Weighted added 167 points to 33,773. In the US, Nasdaq and S&P 500 surged up to 0.90% on Friday, with global markets trading in the green. On the BSE benchmark, Adani Ports, Kotak Mahindra Bank, PowerGrid, Axis Bank, HUL, and Bharti Airtel were among the top Sensex gainers, rising up to 2.44% in the afternoon session. Auto stocks and pharma stocks gained on Monday amid a rally in the global markets, with BSE auto index rising 285 points to 62,052 and BSE pharma index gaining 211 points to 43,295.
In a 6–3 ruling on Friday, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorise the imposition of tariffs. Justices Clarence Thomas, Samuel A Alito Jr. and Brett Kavanaugh dissented from the majority decision. As per CNBC TV18, the judgment is expected to immediately halt a significant portion of the tariffs first announced on "Liberation Day" last year, early in Trump's second term. However, within hours of the ruling, US President Trump swiftly invoked Section 122 of the Trade Act of 1974 to impose a fresh 10–15% global tariff for 150 days. Trump criticised the court's ruling and announced an increase in the global tariff rate from 10% to 15%, describing it as "legally tested" and essential to safeguard US interests. He also stated that the administration would assess and roll out additional legally permissible tariffs in the coming months, injecting a layer of policy uncertainty that could temper market optimism and trigger intermittent phases of elevated volatility across global financial markets. The situation became even more complex when Neal Katyal, the US lawyer who won the tariff case against Trump, said the new tariff rate is also invalid under US laws, adding another layer of confusion to the already volatile situation. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that "The Trump tariff tale has become murkier after the US Supreme Court declared the tariffs illegal. Even the new 15 per cent global tariff imposed under Section 122 will be challenged in courts and the probability of this decision getting annulled is high."
The Supreme Court ruling has significant implications for India-US trade relations, particularly regarding tariffs on Indian goods. According to CNBC TV18, the US had announced 25% reciprocal tariffs on India, along with an additional 25% punitive levy linked to energy imports. While the reciprocal tariffs were later reduced to 18%, the 25% punitive duties were withdrawn after Washington said New Delhi had committed to stopping direct or indirect imports of Russian oil and to increasing purchases of American energy. For India, this effectively resets the interim US-India trade arrangement, limiting tariff exposure to 10% for now. As per The Hindu BusinessLine, Elara Securities calculates that the policy implied effective tariff rate on India is 9.1% versus 13.7% following the first-week February 2026 trade deal, and peak rate of 32.7% in CY25. Madhavi Arora of Emkay Global Research noted that with effective tariff rates at 11-13% and no threat of Russian oil-linked higher tariffs, India expects a more favourable negotiation with the US. India's 34.2% of exports to the US are exempted from any kind of tariffs amounting to 0.7% of nominal GDP, according to Elara Securities. The current 15% global tariff rate is considered less severe than previously proposed actions and leaves scope for continued negotiations.
The US Supreme Court ruling has provided a major boost to Indian textile stocks, with shares rising close to 6% on February 23 following the tariff defeat. Kitex Garments Ltd jumped 5.74% to ₹196.84 on NSE at 10:54 am, Trident Ltd recorded a rise of 4.5% to ₹26.76, while Welspun Living was trading 2.68% higher at ₹140.44 on the stock exchange. According to Moneycontrol, the US Supreme Court's jolt to President Donald Trump's tariffs has provided a major boost to Indian textile stocks, with these companies expected to remain in focus as Indian markets prepare for Monday's opening. Textile stocks such as Vardhman Textile, Welspun Living, KPR Mill, and Trident are expected to remain in focus, as are gems and jewellery companies like Kalyan Jewellers, Senco Gold, and Titan. Auto ancillary companies including Bharat Forge and Apollo Tyres could see improved export prospects, while chemical stocks such as BASF India, Navin Fluorochemical, and UPL might benefit from reduced tariffs. Seema Srivastava, Senior Research Analyst at SMC Global Securities, noted that these sector stocks will remain in focus following the US Supreme Court's decision to invalidate Donald Trump's global tariffs, which had been affecting Indian exporters across multiple sectors.
The US Supreme Court ruling has created significant uncertainty around India-US trade negotiations. According to Reuters, India has delayed plans to send a trade delegation to Washington this week, with the Indian delegation scheduled to depart on Sunday to finalise an interim trade deal. The delegation was set to finalise a framework under which US tariffs on Indian goods would be reduced to 18%, while India committed to purchasing $500 billion worth of US items over five years. Given the court ruling and the uncertainty over tariffs following the judgment, the delay reflects the complex nature of the current trade environment. Analysts welcomed India's trade negotiating team delaying their visit to the US in the light of the changed scenario after the US court striking down Trump's tariffs, as per Zee News. However, from the market perspective, this is indeed a positive, but not sufficient to trigger a sustained rally in the market, they added. Domestic equities will get off to a positive start, as sentiment is strengthened by supportive trade developments, with export-oriented sectors likely to see a bounce, two analysts noted. However, Ajit Mishra, Senior Vice-President of Research at Religare Broking, noted that "we expect the 18 percent tariff to be reinstated. Since India's tariff rate has not been officially notified, it is highly unlikely that the final rate will be lower than the earlier negotiated level. Although the current 15 percent tariff is effective for 150 days, market volatility is likely to persist until there is clarity."
Despite the expected strong opening, uncertainty over the final tariff structure continues to weigh on investor sentiment. As per Moneycontrol, India VIX, the volatility index, rose to 14.36, its highest level since February 1, and remains well above key moving averages, signalling rising anxiety among investors. However, the India VIX index slipped 11% to 12.77 on Monday, indicating a fall in volatility on Dalal Street. According to Zee News, Nifty's structure suggests stabilisation and a gradual recovery in market confidence after recent choppy price action, supported by sustained buying interest at lower levels and an improving short-term outlook. Immediate support for Nifty is placed at 25,370 levels, while resistance is anchored at 25,700 level, market watchers said. Anand James, Chief Market Strategist at Geojit Investments Limited, noted that "The recent wild swings have helped form a flag pattern that projects a vertical rise shortly. However, should we stumble again in the 26200 vicinity, the upside hopes will have to be abandoned. We will go in today on a positive note, but expect upsides to strengthen only once past 25840. Alternatively, inability to float above 25700 could signal loss in upside momentum, but we will wait for a slippage past 25590 to switch sides." Gaurang Shah, Vice-President, Geojit Financial Services, stated that "markets are likely to remain nervous in the near term. Any short-term rise is unlikely to be durable unless there is clarity on where tariff rates finally stand." Shrikant Chouhan, Head of Equity Research at Kotak Securities, sounded a note of caution, noting that "as long as the market remains below the 50-day SMA or 25,770/83200, the weak sentiment is likely to persist." Ajit Mishra, Senior Vice-President of Research at Religare Broking, noted that "we expect the 18 percent tariff to be reinstated. Since India's tariff rate has not been officially notified, it is highly unlikely that the final rate will be lower than the earlier negotiated level. Although the current 15 percent tariff is effective for 150 days, market volatility is likely to persist until there is clarity." For the week ahead, 25,500 emerges as the immediate pivot level, with Hariprasad K of Livelong Wealth noting that sustaining above this level could pave the way for a move towards 25,700.
Analysts expect the foreign portfolio investors (FPIs) to return in a big way post the US Supreme Court ruling, with VK Vijayakumar, Chief Investment Strategist at Geojit Investments, stating that the trend of FPI buying witnessed in February is likely to continue. According to The Hindu BusinessLine, Q3 FY26 results indicate a clear pick-up in corporate earnings with a 14.7% earnings growth, with this trend likely to continue in the rest of FY26. FY27 earnings growth is likely to be around 15%, making Indian valuations fair and attractive for FPIs to turn buyers in India. Hariprasad K, Founder of Livelong Wealth, noted that while supportive global cues may contribute to a positive start, the bullish trend depends on continued institutional support and improving momentum indicators. However, Ponmudi R, CEO of Enrich Money, cautioned that while near-term sentiment has improved, markets may remain vulnerable to intermittent bouts of volatility as geopolitical and trade developments evolve. On Monday, Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth ₹934.61 crore, while Domestic Institutional Investors (DIIs) provided support by purchasing shares worth ₹2,637.15 crore, as per ABP Live.
