The shares of export-oriented textile companies surged on September 17, extending gains for the second consecutive session. This comes as analysts increasingly expect trade talks between India and US to resume, amid cooling tensions between the two countries.
Gokaldas Exports shares surged nearly 7 percent to trade at nearly Rs 835 apiece. Welspun Living shares also rallied around 7 percent to trade at Rs 132.50 apiece. Pearl Global Industries and Arvind shares jumped around 4 percent each, while Indo Count Industries and K.P.R. Mill shares gained around 2 percent each. Raymond shares were up 1 percent.
Cooling India-US trade tensions:
Indo-US relations have seen some improvement in recent days with US President Donald Trump and Prime Minister Narendra Modi agreeing to resume trade talks. Brendan Lynch, a key US trade negotiator arrived in India yesterday to discuss 'trade issues' between Washington and New Delhi. Trump called Prime Minister Modi a "dear friend" and talked optimistically about the trade momentum. PM Modi, in turn, reaffirmed India and US as "close friends and natural partners" and expressed confidence that current trade talks would unlock significant potential for both nations.
In a post on Truth Social, Trump said he had a "wonderful call" with PM Modi. "I wished him a very Happy Birthday! He is doing a tremendous job. Narendra: Thank you for your support on ending the War between Russia and Ukraine! President DJT," he wrote. The Indian Prime Minister then thanked him for his birthday wishes.
Easing trade tensions to boost export-oriented textile stocks:
The cooling trade tensions between India and US provided much needed boost to the stock markets, as investors earlier remained worried over the impact of Trump's 50 percent tariff on India. All these developments reignited hopes for easing trade tensions between the two countries, which would likely benefit the export-oriented textile stocks.
Motilal Oswal Financial Services said the markets are likely to be supported by encouraging developments in the ongoing US-India trade negotiations. "A recent phone conversation between the US President and Indian Prime Minister on Modi’s birthday signals a willingness to ease tensions between the two major economies, further boosting investor sentiment," the domestic brokerage said.
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