Domestic equity benchmark indices opened higher and surged as much as 5 per cent in early trade on February 3, 2026, registering their biggest single-day gains in absolute terms.
The rally came after the announcement of a India-US trade deal by Prime Minister Narendra Modi and US President Donald Trump, under which tariff rates were cut to 18 per cent from 25 per cent earlier. As part of the agreement, India will also cut its tariffs and non-tariff barriers on US goods to zero. This announcement boosted investor sentiment across sectors and market breadth and all sectoral indices traded in the green, as of the time of writing.
The Sensex surged as much as 4,205.27 points, or 5.15 per cent, to hit an intraday high of 85,871.73, while the Nifty jumped 1,252.80 points, or 5 per cent, to touch 26,341.20 during the session. Both benchmark indices climbed close to their record highs amid broad-based buying.
Realty, Auto, Pharma, Financials Lead
At the time of writing, Nifty Realty traded higher by more than 5 per cent, emerging as the biggest sectoral gainer. Following it, Nifty Auto, Nifty Financial Services, Nifty Pharma, Nifty Healthcare, Nifty Consumer Durables and Nifty Chemicals also traded higher by over 3 per cent each.
Nifty Bank, which tracks the 12 most valuable and actively traded banking stocks, surged as much as 3,145.85 points, or 5.36 per cent, to hit a record high of 61,764.85.
Other sectoral indices such as Nifty IT, Nifty Metal, Nifty PSU Bank and Nifty Private Banks also traded higher between 2 per cent and 3 per cent each. Nifty Oil & Gas and Nifty FMCG also were in green.
Adani Enterprises Leads Nifty 50 Pack
Within the Nifty 50 index constituents, Adani Enterprises jumped over 11 per cent, Jio Financial Services and Adani Ports surged by over 8 per cent, followed by Bajaj Finance, Bajaj Finserv, Power Grid, Eternal, Shriram Finance, Dr Reddy's Laboratories, Max Healthcare, IndiGo, Sun Pharma, and Larsen and Toubro, all of which gained between 4 and 5 per cent each.
Index heavyweights Reliance Industries surged nearly 4 per cent, and HDFC Bank and ICICI Bank gained around 3 per cent each.
Barring Nestle India, which traded slightly lower, all other constituents were in green.
FIIs Expected To Return, Lending Support To Rupee
Market experts said the India–US trade deal is likely to spur fresh inflows from foreign institutional investors (FIIs), lending support to the rupee.
Reflecting the improved sentiment, the domestic currency appreciated 119 paise to 90.30 against the US dollar in early trade today. Meanwhile, the dollar index, which measures the greenback’s strength against a basket of six major currencies, slipped 0.20 per cent to 97.43.
Indian equities’ underperformance over the past year was driven largely by sustained foreign portfolio investor (FPI) outflows, stemming more from geopolitical and policy uncertainty than from weak corporate fundamentals, Sujan Hajra, Chief Economist and Executive Director at Anand Rathi Group, said. He noted that concerns around India’s trade relationship with the US had pushed up perceived risk premia and currency uncertainty for global investors, triggering capital outflows even as domestic earnings remained resilient.
With the India–US treaty now in place, Hajra said this overhang is beginning to ease, marking a return of geopolitical and trade stability rather than just marginal tariff relief. As risk premia normalise, India is once again emerging as an attractive destination for global capital, backed by strong growth prospects, strategic alignment, deep domestic demand and strengthening economic linkages with the US and Europe.
