Sensex Jumps Over 2,000 Points, Nifty Nears 27,800 on India-US Trade Deal

Indian stock markets opened on a strong note on Tuesday as investors reacted to the overnight announcement of a trade agreement between India and the United States. The breakthrough came after a phone call between US President Donald Trump and Prime Minister Narendra Modi.

Under the deal, the US will drop reciprocal tariffs on Indian exports to 18% from an earlier 25%, in exchange for what Trump claimed would be New Delhi stopping purchases of Russian oil.

At 9.30 am, the BSE Sensex was up 2,269 points at 83,917.95, about 2.74% higher than its Monday closing level. On the NSE, Nifty 50 stocks were also higher by as much as 700 points, quoting at 25,785, up 2.72% from the previous session.

Most of the Sensex 30 stocks were trading in the green in early deals on February 3, with Adani Ports up 8.27%, Bajaj Finance rising 6.46%, IndiGo gaining 5.20%, Bajaj Finserv advancing 4.94%, Eternal climbing 4.60% and Sun Pharma adding 3.90%, while ITC (down 0.50%) was the only stock in the red.

Sectoral indices traded firmly higher, led by Nifty Realty, which jumped 4.63%, followed by Nifty Financial Services ex-Bank up 4.31%, Nifty Consumer Durables gaining 3.76%, Nifty Chemicals rising 3.72%, Nifty Auto advancing 3.37% and Nifty Financial Services climbing 3.31%. Other notable gainers included Nifty Pharma (+3.12%), Nifty Healthcare Index (+3.07%), Nifty Private Bank (+2.87%), Nifty Metal (+2.67%) and Nifty IT (+2.44%), while FMCG saw more modest gains of 0.37%, indicating broad-based buying across sectors.

The broader market remained strong, with the BSE MidCap index rising 3.05% and the SmallCap index gaining 2.63%.

The rupee also rose over 1% to 90.40 against the US dollar in early trade. The yield on the 10-year benchmark government bond eased by 5 basis points to 6.72%.

“The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50% to 18% is a game changer for the Indian economy and stock markets. The deal getting delayed was the single most important factor that was weighing on the markets. The impact of the deal will be manifold. One, India’s growth rate will rise to around 7.5% in FY27, assisted by higher exports to the US. Two, corporate earnings, already showing signs of revival in FY27, can accelerate to around 16% to 18%. Three, the rupee will strengthen sharply,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

He added that the combination of the US-India trade deal, the EU-India trade deal and the growth-oriented Budget will boost market sentiment and animal spirits in the economy.

“The stock market, anticipating and discounting these developments, will boom. Technically, the market, which is heavily short, will witness short-covering, adding fuel to the rally. The rally will be widespread across market caps, but largecaps, which are fairly valued, have the potential to outperform, aided by FII inflows. FII favourites in largecaps such as banking leaders, non-banking financials and other blue chips in telecom, capital goods and IT will surge. Textile stocks will be in special focus. This will mark the beginning of a boom in Indian stock markets, taking them to new records,” Vijayakumar added.

On the technical view, Anand James, Chief Market Strategist at Geojit Investments Limited, noted that yesterday’s sharp rise above 25,000 towards the close has put the 25,800 objective in play, with hopes of even 26,200. “That said, an inability to sustain above 25,800 would see Nifty settling in the 25,430–25,340 region,” he said.