NEW DELHI, Feb 3: Indian equity markets rallied sharply on Tuesday, with the Sensex and Nifty gaining nearly 3 per cent, following the announcement of the India–US trade deal.
As of 9:25 am, the Sensex rose 2,421 points (2.97%) to 84,088, while the Nifty advanced 741 points (2.96%) to 25,829. Midcap and smallcap indices also saw robust gains, with the Nifty Midcap 100 up 3.10% and the Nifty Smallcap 100 rising 3.25%.
All sectoral indices reported strong gains, led by realty (+4.47%), auto (+3.78%), consumer durables (+3.69%) and IT (+3.04%).
The trade agreement, announced by US President Donald Trump after a call with Prime Minister Narendra Modi, reduces reciprocal tariffs on Indian goods from 25% to 18% and eliminates the additional 25% duty on Russian crude oil. The deal takes effect immediately.
At 18%, India’s tariff rate is now lower than several major export oriented Asian economies, including Bangladesh, Sri Lanka, Taiwan, and Vietnam (20%) and Indonesia, Malaysia, Thailand, the Philippines, and Pakistan (19%).
Market analysts said the trade deal is a “game changer” for the Indian economy, removing a key overhang on stocks and potentially boosting corporate earnings to 16–18% in FY27. India’s growth rate is expected to rise to around 7.5% next fiscal year, driven by higher exports to the US.
The rupee is also likely to rebound, supported by the combination of US–India and EU–India trade deals and the growth oriented Union Budget, potentially attracting foreign capital inflows and strengthening India’s Balance of Payments.
Large-cap sectors such as banking, non-banking financials, telecom, capital goods, and IT are expected to see significant inflows from foreign investors.
In the Asian markets, Japan’s Nikkei surged 3.23%, South Korea’s Kospi jumped 5.04%, while China’s Shanghai and Shenzhen indices rose 0.38% and 0.93% respectively. Hong Kong’s Hang Seng edged up 0.11%. US markets also closed in positive territory, with the Nasdaq up 0.56%, S&P 500 +0.54%, and Dow +1.05%.
On February 2, foreign institutional investors (FIIs) were net sellers of equities worth ₹1,832 crore, while domestic institutional investors (DIIs) were net buyers of ₹2,446 crore.