Sensex Jumps 2,400 Points on Landmark India-US Trade Deal

Market Surges on Positive Global Cues

Indian equity markets opened with a historic surge on Tuesday, February 3, 2026, as investors reacted positively to a landmark trade agreement between India and the United States. Benchmark indices Sensex and Nifty opened with a significant gap-up, driven by renewed optimism about export growth and the removal of a key economic uncertainty. At the opening bell, the Sensex was up 2,413 points, or 2.95 percent, at 84,079, while the Nifty surged 734 points, or 2.93 percent, to 25,823.

The India-US Trade Deal Unpacked

The market rally was triggered by an announcement from US President Donald Trump confirming a new trade framework with India. The deal involves a substantial reduction in US reciprocal tariffs on Indian goods from 50 percent down to 18 percent. This move reverses the punitive tariffs Washington had imposed earlier, citing New Delhi's continued purchase of Russian oil. In return, India has committed to lowering its own tariffs and non-tariff barriers on US products and increasing purchases of American energy and technology. The agreement comes shortly after India signed a free trade agreement with the European Union, a development seen as increasing pressure on Washington to finalize its own deal.

An Explosive Market Reaction

Sentiment on Dalal Street turned decisively bullish overnight. The GIFT Nifty, an early indicator of the Nifty 50's direction, had signaled a massive gap-up, trading at a premium of over 700 points. The pre-open session saw the Sensex surge by as much as 3,648 points and the Nifty touch 26,308. The rally was broad-based and powerful, adding nearly ₹13 lakh crore to investor wealth within the first few minutes of trading. Market breadth was overwhelmingly positive, with 48 of the 50 stocks on the Nifty index advancing in early trade. Overall, approximately 2,400 stocks advanced on the exchanges compared to just 133 declines, highlighting the widespread buying interest.

Broad-Based Sectoral Gains

The rally was not confined to a few heavyweights but was spread across multiple sectors. Export-oriented industries were the primary beneficiaries. The Nifty IT index rose 2.5%, with major constituents like Infosys, Tata Consultancy Services, and HCL Technologies gaining between 1.6% and 3.1%. Auto stocks also saw strong buying, with gains ranging from 1.2% to 8.9%. Auto ancillary companies with significant US exposure, such as Bharat Forge and Sona BLW Precision Forgings, jumped over 8% and 7% respectively. Other leading sectors included Nifty Realty, which surged over 4 percent, along with metals, infrastructure, and banking indices, which all posted strong gains.

Key Market Data Summary

Industry and Government Response

India Inc. welcomed the trade breakthrough. Kumar Mangalam Birla of Aditya Birla Group stated that the reduced tariffs would strengthen strategic ties and unlock manufacturing opportunities. RPG Enterprises Chairman Harsh Goenka called it the “Father of all deals.” Government officials also expressed relief. Department of Financial Services Secretary M Nagaraju commented that “one dark cloud over the Indian economy has subsided,” adding that the deal provides greater certainty for companies. US Ambassador to India, Sergio Gor, described the agreement as a “new era of relations” between the two nations.

Analyst Commentary and Outlook

Market experts noted that the deal eliminates a key policy uncertainty that had weighed on investor sentiment. Vikram Kasat of PL Capital suggested the positive surprise would force foreign portfolio investors (FPIs) who were heavily short in the market to cover their positions, leading to a sharp surge. Analysts believe the deal enhances earnings visibility for export-oriented sectors and could help reverse recent foreign capital outflows. While cautioning traders against chasing the initial gap, the consensus points toward a sustained positive sentiment, with technical levels on the Nifty now pointing towards 25,800–26,000 in the near term.

Conclusion: A Major Overhang Removed

The India-US trade agreement has provided a significant boost to Indian financial markets, removing a major overhang that had contributed to market volatility and foreign outflows. The sharp reduction in US tariffs is expected to improve the competitiveness of Indian exporters and support corporate earnings in key sectors. As the market digests the immediate gains, investors will now focus on the implementation details of the deal and its long-term impact on trade flows, corporate investment, and India's broader economic trajectory.