Historic Rally as India-US Trade Deal Propels Markets to New Heights on Tuesday, February 3, 2026
Tuesday, Tuesday, February 3, 2026, marked one of the most significant trading sessions in the history of the Indian capital markets. In a spectacular display of bullish momentum, the domestic benchmarks recorded their best single-day performance in months, driven by a landmark bilateral trade agreement between India and the United States and robust corporate earnings. The rally added over ₹12.5 lakh crore to investor wealth in a single session.
Executive Summary: Indices at a Glance
The BSE Sensex soared by 2,072.67 points, or 2.54%, to close at 83,739.13. Simultaneously, the Nifty 50 climbed 639.15 points, or 2.55%, ending the day at 25,727.55. The banking sector also witnessed a massive recovery, with the Bank Nifty surging 1,422 points, or 2.43%, to reclaim the 60,000 mark, closing at 60,041.
Benchmark Performance Table
| Index | Closing Value | % Change | Absolute Change |
|---|---|---|---|
| Nifty 50 | 25,727.55 | 2.55% | +639.15 |
| Sensex | 83,739.13 | 2.54% | +2,072.67 |
| Bank Nifty | 60,041.00 | 2.43% | +1,422.00 |
| Nifty Midcap 100 | 59,307.10 | 2.84% | +1,637.25 |
| Nifty Smallcap 100 | 8,268.15 | 3.03% | +243.20 |
Market Mechanics: Opening and Intraday Movement
The market opened with a massive gap-up on Tuesday, February 3, 2026. The Nifty 50 opened at 26,308.05, a gap of over 650 points, while the Sensex debuted at 85,323.20. During the day, the Nifty touched an intraday high of 26,341.20 before seeing some profit-booking at higher levels. The Sensex reached a peak of 85,871.73. Despite the mid-day cooling, the indices maintained significant gains, reflecting broad-based buying interest across large, mid, and small-cap segments.
Top Movers Analysis: Gainers and Losers
Top 5 Gainers (NSE)
- Adani Enterprises Ltd (+10.38%): The stock closed at ₹2,202.60 following a phenomenal Q3 result where net profit grew 97 times year-on-year to ₹5,627 crore.
- Adani Ports and SEZ Ltd (+9.12%): Reaching ₹1,530.90, the ports major benefited from the trade deal news, which is expected to significantly increase cargo volumes.
- Jio Financial Services Ltd (+8.07%): Closed at ₹263.95 as investors anticipated a surge in financial activity and credit demand following the trade deal.
- Bajaj Finance Ltd (+6.54%): Reached ₹964.40, supported by strong quarterly performance with AUM growing 22% to ₹4.85 lakh crore.
- Sun Pharmaceutical Industries Ltd (+4.81%): Ending at ₹1,702.80, the pharma giant surged as the India-US deal promised reduced non-tariff barriers for medical exports.
Top 5 Losers (NSE)
- ONGC (-1.2%): Dragged down to ₹257.00 by a decline in Brent crude prices to $65.96 per barrel.
- Tech Mahindra Ltd (-0.66%): Closed at ₹1,716.50 as AI-related concerns and mixed global earnings dampened the IT outlook.
- ITC Ltd (-0.3%): Faced headwinds from underperformance in the FMCG segment and volume pressure in cigarettes.
- Bharat Electronics Ltd (-0.16%): Saw minor profit-booking after a multi-month rally in the defense space.
- Nestle India Ltd (-0.08%): Dipped slightly to ₹1,271.00 amidst broader caution regarding rural volume growth.
Sectoral Deep Dive: Broad-Based Participation
- Realty (+4.79%): The standout performer of the day. Investors anticipate a boom in residential and commercial demand as economic growth forecasts were upgraded.
- Pharma (+3.02%): Heavily influenced by the trade deal, which simplifies regulatory pathways to the US market.
- Auto (+2.81%): Gained on expectations of lower input costs and increased export opportunities for component manufacturers.
- Metal (+2.62%): Reflecting optimism in infrastructure spending and industrial activity following Budget 2026.
- Banking (+2.43%): Private banks like ICICI and HDFC Bank led the charge as credit growth projections improved.
- IT (+1.41%): Underperformed the broader market but remained positive as the trade deal improved business visibility with US clients.
- FMCG (+0.36%): The laggard sector, struggling with high valuations and sluggish rural demand.
Institutional Activity: FIIs Return with Force
Tuesday, February 3, 2026, marked a pivotal shift in institutional flow. Foreign Institutional Investors (FIIs) became net buyers of ₹5,236.28 crore, ending a prolonged period of selling. This included gross purchases of ₹27,677.68 crore against gross sales of ₹22,441.40 crore. Domestic Institutional Investors (DIIs) also supported the rally with a net buy of ₹1,014.24 crore. The combined net purchase of over ₹6,250 crore provided the necessary liquidity for the index breakout.
Market Breadth Analysis
The market breadth was overwhelmingly positive, indicating that the rally was not restricted to a few heavyweights. On the NSE, 2,911 stocks advanced while only 435 declined. On the BSE, the ratio was similarly lopsided with 3,304 advances against 981 declines. This strong advance-decline ratio is often a precursor to a sustained bull run.
Global Factors and Economic Impact
While Indian markets soared, global cues were mixed. US markets ended lower on February 3, 2026, with the Nasdaq dropping 1.43% due to AI concerns. However, Asian markets rallied, with the Nikkei 225 surging 3.9% and the Kospi jumping 5%. The Indian Rupee was a star performer, surging 1.33% to close at ₹90.27 against the USD, making it the best-performing Asian currency of the day.
Key News Impact Analysis: The India-US Trade Deal
The primary catalyst was the landmark trade deal announced by the US. Key components included:
- Tariff Reduction: US reciprocal tariffs on Indian goods slashed from 50% to 18%.
- GDP Upgrade: Goldman Sachs immediately upgraded India's 2026 GDP forecast to 6.9%.
- Energy Shift: India agreed to transition oil purchases from Russia to US crude, aligning energy strategies with the trade agreement.
Technical Outlook
Technically, the Nifty 50 has reclaimed its 50 and 100-day moving averages. The India VIX plummeted to 12.89, suggesting that the 'fear' in the market has significantly subsided. Support for the Nifty now shifts higher to 25,700, while resistance is pegged at 26,000 and 26,300 levels. Analysts believe a close above 26,000 in the coming sessions could lead to fresh all-time highs.
Strategic Implications for Investors
Retail investors should note the shift in leadership toward infrastructure, realty, and banking sectors. The resumption of FII flows suggests that the recent correction has found a solid floor. While the surge was massive, investors are advised to focus on quality earnings and look for consolidation periods to add to positions in sectors benefiting from the new trade dynamics, particularly those with high US export exposure like Pharma and Specialty Chemicals.