Indian equity markets roared into a high tide on Tuesday, February 3, 2026, as the investors cheered a historic trade breakthrough between Washington and New Delhi. The benchmark BSE Sensex experienced one of its biggest single-day point advances of any time in history, climbing over 4,200 points to an intraday high of 85,871.73, as the NSE Nifty 50 jumped nearly 1,250 points to hit 26,300 levels.
Trump’s announcement that the United States had reduced reciprocal tariffs on Indian goods from 25% to 18% and completely rescinded the punitive 25% duty related to Russian oil purchases sent the market soaring.
“A Game-Changer” for Indian Exports
Market analysts are referring to the deal as a “tectonic shift” for the Indian economy. By alleviating the effective tariff burden and de-tethering the “hanging sword” of Russian oil sanctions, the deal represents significant valuation headroom for export-oriented sectors. “The headline announcement of the eagerly awaited US-India trade pact is transformational,” Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.
“This takes away the biggest overhang that’s been dragging Indian markets down for months.” Top Gaining Sectors and Stocks. The rally spread was spread across the globe, with "animal spirits" strengthening back to IT, Auto and Textile. Key highlights include:
- IT Services: Tech stalwarts Infosys, Wipro and TCS jumped between 4% and 7% after their US-listed ADRs soared overnight.
- Textiles: As the direct recipients of the 18% tariff cap, stocks like Gokaldas Exports, Welspun Living and KPR Mill gained more than double-digit.
- Banking & Finance: HDFC Bank and ICICI Bank took the lead when FIIs (Foreign Institutional Investors) took advantage of the higher Rupee and stable interest rate by adding to their portfolio to become net buyers.
- Chemicals: SRF and Navin Fluorine surged more than 5% on anticipation of growing demand from U.S. supply chains that were expected to move away from regional rivals.
Short-Covering Adding Fire to the Fire
A big short-covering rally further compounded the surge. This was after the post-Budget volatility and tariff fears saw numerous institutional traders having become “short” in the market, forcing them to buy back at higher prices, and thus creating a virtuous cycle of gains.
Market: Big New Peaks on horizon?
With the India-EU Trade Agreement already in place and the India-US Pact finalized, analysts anticipate India’s GDP growth would likely accelerate toward 7.5% in FY27. This means that without policy uncertainty, an FII inflow period of prolonged activity might be initiated, and ultimately the Nifty will be closer to the 27,000 threshold at the end of the quarter. The devil will be in the details of its formal text, but today Dalal Street is cloaked in green, heralding the onset of what some look forward to a long-term “Trump-Modi” bull market.
