New Delhi, Feb. 4 -- After nearly one-and-a-half years of broad weakness, India's stock market began to flash signs of a revival on Tuesday. The BSE Sensex jumped more than 4% in early trade before closing 2.5% higher at 83,739, while the rupee strengthened more than 1% against the US dollar to 90.27.

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...