Shares of Tata Motors rallied over 3% on Thursday, marking gains for a second consecutive session, as investor sentiment soared following reports of a potential trade agreement between the United States and the United Kingdom.
Market Reaction and Stock Performance
Tata Motors shares surged 3.45% to ₹704.00 apiece on the Bombay Stock Exchange (BSE), making it the top gainer on the Nifty 50 index. The stock has now climbed 8.6% over two sessions.
US-UK Trade Deal Speculation
According to a report by The New York Times, the US is expected to announce a trade pact with the UK later in the day. US President Donald Trump hinted at the development on his Truth Social account, stating he would hold a news conference at 10 AM Washington time to discuss “a major trade deal with representatives of a big and highly respected country.” However, he did not disclose the name of the country involved.
Impact on Tata Motors and Jaguar Land Rover
Tata Motors, the parent company of luxury carmaker Jaguar Land Rover (JLR), stands to benefit significantly from a US-UK trade deal, as the US market accounts for nearly 20% of JLR’s revenues. JLR had temporarily halted vehicle shipments to the US in April after a 25% tariff was imposed on all auto imports. Although recent reports suggest that shipments have resumed, there is no official confirmation.
India-UK Free Trade Agreement (FTA) Boosts Sentiment
Investor optimism was further buoyed by the signing of the India-UK Free Trade Agreement (FTA) earlier this week. The FTA is expected to create new growth opportunities for JLR in the Indian market, potentially supporting higher sales.
Tata Motors Demerger Approved
Adding to the positive momentum, Tata Motors shareholders have approved the demerger of the company’s Commercial Vehicle (CV) business into a separate, publicly listed entity. The decision received near-unanimous support, marking a significant step in the company’s restructuring strategy.
As part of the demerger, existing shareholders of Tata Motors will receive one share of the newly listed CV business for every share held in the currently listed entity.
Outlook
With multiple positive triggers, Tata Motors continues to attract investor interest. The potential US-UK trade deal, the India-UK FTA, and the company’s restructuring efforts are expected to drive further momentum in the stock.
