Mumbai, February 3, 2026, 16:16 IST — The market has closed.
- Nifty 50 jumped 2.55% to end at 25,727.55; Sensex rose 2.54%, closing at 83,739.13
- Stocks surged after the U.S.-India trade agreement, with banks and export-driven firms taking the lead
- Attention now turns to January’s services PMI on Feb. 4, followed by the RBI’s policy decision on Feb. 6
India’s key indices surged Tuesday, with the Nifty 50 climbing 2.55% to finish at 25,727.55. The BSE Sensex rose 2.54%, closing at 83,739.13. Broad-based buying drove the rally, led by banks and exporters.
The rally came after U.S. President Donald Trump announced a trade deal following a call with Narendra Modi. The agreement cuts U.S. tariffs on Indian goods from 50% to 18%, in return for India halting its Russian oil imports and lowering trade barriers. Marcella Chow of J.P. Morgan Asset Management said a successful deal “should help enhance investor confidence … while strengthening the Indian rupee.” Benchmark 10-year yields dropped about 5 basis points (0.05 percentage point) in early trading. Reuters
After months of tariff uncertainty, traders were already braced for increased volatility. The strain was most visible in currency movements and foreign investment flows, rather than just the main indices.
Reliance Industries surged up to 4% in early trading, with sectors like auto parts, textiles, and speciality chemicals also gaining on hopes for improved U.S. market access. Uttam Kumar Srimal from Axis Direct called the agreement a catalyst for “valuation re-rating.” Peeyush Mittal of Matthews Asia added, “Now the trade deal breaks this loop … evaluate Indian equities more objectively.” The report noted foreign portfolio investors (FPIs) have offloaded $23 billion worth of Indian shares since the start of 2025. Reuters
The rupee jumped 1.36% to 90.2650 per dollar, marking its sharpest single-day rise since December 2018, after plunging to a record low of 91.9875 on Friday. MUFG lowered its end-March rupee forecast to 91.75, while Vivek Rajpal of JB Drax Honore cited the onset of seasonal balance-of-payments support.
Adani Ports and Special Economic Zone climbed as much as 9.54% after it raised the top end of its fiscal 2026 core earnings forecast to 228 billion rupees ($2.53 billion) and posted a quarterly profit jump of nearly 21%. Ankita Shah of Elara Securities noted revenue growth was “in line with our estimates.” CEO Ashwani Gupta pointed to “sustained momentum” and the acquisition of the North Queensland Export Terminal. Reuters
The market entered Tuesday still feeling the effects of a budget-day selloff, with benchmarks down roughly 2% on Sunday after the government proposed raising the securities transaction tax (STT) on derivatives and hinted at increased borrowing. On Monday, the Nifty clawed back some losses. Seshadri Sen of Emkay Global Financial Services described the downside risk as “limited” following the drop. Anand Gupta from Allianz Global Investors added that the STT hike would likely have a “limited” impact on institutional hedging. Reuters
Investors are reacting more to headlines than the actual details: the White House hasn’t clarified when the lower tariff rate will take effect or the schedule for stopping Russian oil imports. As of late Monday, no proclamation or Federal Register notice had been released to formalize the tariff change.
Outside equities, traders are focused on government borrowing and the Reserve Bank of India. The budget set a record gross borrowing of 17.20 trillion rupees for fiscal 2027, driving yields toward the upper end of their recent range. Vivek Rajpal noted the supply-demand mismatch in government bonds is expected to persist, forcing the RBI to remain a marginal buyer. Key upcoming events include the January services PMI on Feb. 4 and the RBI policy decision on Friday, Feb. 6.
