Tata Motors saw its stock climb nearly 3% intraday on Wednesday, buoyed by global trade optimism after reports emerged that former US President Donald Trump may soon announce a trade agreement between the United States and the United Kingdom.
According to The New York Times, citing three sources close to the matter, Trump is expected to unveil the trade deal at a press conference scheduled for Thursday from the Oval Office. On his Truth Social platform, Trump hinted at a “major trade deal with representatives of a big, and highly respected, country,” fueling market anticipation. Though he stopped short of naming the UK explicitly, British officials have confirmed progress on a potential deal, which may include reduced tariffs on steel and automobiles.
This development bodes well for Jaguar Land Rover (JLR), the luxury car unit of Tata Motors, which derives almost 20% of its revenues from the US. JLR had earlier suspended shipments to the US due to the imposition of a 25% tariff on auto imports in April. While there are signs of resumption, official confirmation remains pending.
At 9:37 AM IST on May 8, Tata Motors shares were trading 2.4% higher at Rs 697, eventually hitting a high of Rs 704.5 during the day.
Adding to the positive momentum, the India-UK Free Trade Agreement (FTA), signed on Tuesday, also boosted sentiment. The FTA promises substantial tariff cuts on premium car imports to India, slashing duties from over 100% to just 10% under a quota system.
In another major development, Tata Motors announced that shareholders have overwhelmingly approved a long-anticipated demerger. The company will be split into two separate listed entities: one for commercial vehicles and another for passenger vehicles, including JLR. The proposal secured 99.9995% approval in a recent shareholder vote.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks. Readers are advised to consult with their financial advisors before making any investment decisions.
