The Bombay Stock Exchange's Sensex and the National Stock Exchange's Nifty indices surged at the opening today, buoyed by positive sentiment surrounding the newly inked India-US trade agreement. The Sensex opened with a jump of 600 points, while the Nifty 50 climbed 150 points, reflecting strong investor confidence in the potential benefits of the deal.
The positive market reaction follows the finalization of a bilateral trade agreement between India and the United States after months of negotiations. A key feature of the agreement is the reduction of tariffs by the U.S. on Indian goods to 18% from previous rates as high as 50%. In return, India has indicated it will lower or remove tariffs on selected U.S. imports in sectors including energy, agriculture, and industrial goods.
The India-US trade deal has boosted the Indian stock market by reducing trade uncertainty. Markets are reacting positively due to the expected increase in exports, better earnings visibility, and deeper global trade relations. Lower tariffs mean Indian companies can offer goods in the U.S. at more competitive prices, supporting revenue growth for sectors like textiles, engineering goods, chemicals, and IT-linked manufacturing.
The trade deal is expected to revive exports, restoring price competitiveness for labor-intensive sectors like textiles, leather, and gems. The agreement also reaffirms the India-US partnership as a counterweight to China's influence in the Indo-Pacific region. Moreover, tax holidays for data centers and nuclear energy cooperation are projected to attract billions in foreign direct investment from US tech giants.
On February 3, 2026, the stock market benchmark indices Sensex and Nifty closed 2.5% higher after the India and US trade deal was agreed upon. The 30-share BSE Sensex jumped 4,205.27 points, or 5.14%, to hit a high of 85,871.73 before ending at 83,739.13, up 2,072.67 points, or 2.54%. The 50-share NSE Nifty zoomed 639.15 points, or 2.55%, to settle at 25,727.55, after surging 1,252.8 points, or 4.99%, to 26,341.20 during the day.
Adani Ports, Bajaj Finance, InterGlobe Aviation, Power Grid, Sun Pharma, Bajaj Finserv and Reliance Industries were among the top gainers from the 30 Sensex firms. Tech Mahindra and Bharat Electronics were the only laggards.
Analysts suggest that the short-term market impact is likely to be positive, with export-oriented companies leading the gains. The Nifty's rise of approximately 2.8% reflects the market's anticipation of higher exports, improved earnings visibility, and stronger global trade ties. The reduction in the fear factor in the markets due to the trade deal offering greater certainty, is reflected in the tapering of VIX this week from 13.63 levels to 11.94.