Sensex settles over 2,000 pts higher, Nifty ends above 25,700: India-US trade deal among key factors behind market rally
The equity benchmark indices Sensex and Nifty settled 2.5 percent higher on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 percent from current 25 percent.
After starting the trade on a buoyant note, the Sensex jumped 4,205.27 points or 5.14 percent to hit the day’s high of 85,871.73. It later ended at 83,739.13, up 2,072.67 points or 2.54 percent.
The Nifty zoomed 639.15 points or 2.55 percent to settle at 25,727.55. During the day, it surged 1,252.8 points or 4.99 percent to 26,341.20.
The domestic shares jumped to post their best day in nine months, led by Reliance and heavyweight financials, while export-oriented stocks powered a broad rally after the India–U.S. trade deal removed a key market overhang.
Adani Enterprises, Adani Ports and Special Economic Zone and Jio Financial Services were among the top gainers in the Nifty50 pack, rising up to 11 percent, while Oil & Natural Gas Corporation and ITC declined up to 1 percent. Market breadth was positive as about 2911 shares advanced, 435 shares declined and 123 shares unchanged.
All the 16 major sectoral indices traded in the green. The broader market also witnessed strong buying interest, with Nifty small-cap100 and mid-cap100 indices rising up to 3.5 percent each.
Key factors behind market rally
1) India-US trade deal: Trump on Monday said the US has reached a trade agreement with India under which tariffs on Indian exports to the US will be reduced to 18 percent from 50 percent. He announced the decision on social media following a phone call with Prime Minister Narendra Modi.
“The dramatic announcement of the long-awaited US-India trade deal and the US decision to cut tariffs on India from 50 percent to 18 percent is a game changer for the Indian economy and stock markets. “The combination of the US-India trade deal, the EU-India trade deal and the growth-oriented Budget will boost the market sentiments and the animal spirits in the economy. The stock market, anticipating and discounting these developments will boom,” VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said.
2) Edge over regional export competitors: India now faces an 18 percent tariff rate, which is lower than or comparable to several regional peers. Bangladesh, Sri Lanka, Taiwan and Vietnam face tariffs of 20 percent, while Pakistan, Indonesia, Malaysia, Thailand and the Philippines are subject to 19 percent. Cambodia also faces a higher tariff rate of 19 percent.
Share Market LIVE Updates
3) Rupee rises: The Indian rupee’s sharp intraday rise of nearly 1.5 percent on February 3, 2026 places the currency among a rare set of sessions, with data showing that such gains have occurred only 10 times in the past 12 years.
4) Strong global cues: In Asian markets, South Korea’s Kospi rebounded and jumped 5 percent. Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index were also trading higher. US markets ended higher on Monday.
5) Crude declines: Brent crude, the global oil benchmark, dipped 0.51 percent to USD 65.96 per barrel. Lower crude prices tend to ease inflationary pressures and improve India’s trade balance, providing support to equity markets.
Technical outlook
Rupak De, Senior Technical Analyst at LKP Securities, said “The Nifty opened with a gap-up and witnessed a decent profit taking. On the daily chart, a large red candle has formed; however, the index managed to close above the 38.2 percent Fibonacci retracement level, placed around 25,500. This has led to a swift shift in sentiment from “sell on rise” to “buy on dips” within a single session. Going forward, immediate support is seen in the 25,470–25,500 zone. On the higher end, resistance is placed at 26,000–26,200.”
