Markets witnessed a sharp rally on Tuesday, with the Sensex soaring 2,072.67 points or 2.54 per cent to close at 83,739.13, marking its biggest single-day gain in terms of points since November 22, 2024, when it had jumped 1,961.32 points, FPIs returned as big buyers on Tuesday, thanks to Indo-US trade deal.
The Nifty 50 surged 639.15 points or 2.55 per cent to settle at 25,727.55, driven by a landmark India-US trade agreement that significantly eased tariff concerns. The Nifty, in fact, opened higher at 26,308.05 and rose further to 26,341.20, almost near its all-time high of 26,373.20, before turning weak from the peak.
Ravi Singh, Chief Research Officer at Master Capital Services, said for a prolonged period, uncertainty over delay in trade negotiations and the risk of elevated tariffs acted as an overhang for Indian equities, particularly for export-oriented sectors. That overhang now appears largely tackled. Lower tariffs now improve the competitiveness of Indian exports and enhances visibility of earnings across sectors such as engineering goods, fisheries, textiles, chemicals and auto ancillaries, he said.
According to exchange provisional data, FPIs pumped in ₹5,426.24 crore worth shares on Tuesday after pulling out nearly ₹30,000 crore in 2026 so far.
The breakthrough came as the US agreed to reduce reciprocal tariffs on Indian imports from 25 per cent to 18 per cent and fully withdrew the additional 25 per cent punitive levy linked to Indo-Russian oil trade, implying a sharp 32 per cent reduction in the overall tariff burden. “The development has significantly improved sentiment, as expectations of stronger trade flows and potential FII inflows have boosted confidence in the domestic currency,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Broad participation
Market breadth turned decisively positive with 3,279 stocks advancing against 1,015 declines on the BSE, while 121 stocks touched 52-week highs and 117 hit 52-week lows. The Nifty Midcap 100 surged 1,639.50 points or 2.84 per cent to 59,307.10, while the Nifty Smallcap 100 jumped 465.60 points or 2.82 per cent to 16,988.95, reflecting strong broad-based participation.
The market capitalization of BSE-listed firms surged around ₹12.10 lakh crore to ₹467.03 crore..
Sectoral gains were led by realty stocks, which rallied nearly 4.8 per cent, followed by infrastructure, energy, pharma and banking. The Nifty Financial Services index gained 875.05 points or 3.27 per cent to 27,674.05, while the Nifty Bank rose 1,422.30 points or 2.43 per cent to 60,041.30 after touching a fresh all-time high of 61,764 during the session.
Top gainers
Among Nifty 50 constituents, Adani Enterprises emerged as the top gainer, surging 10.58 per cent to close at ₹2,206.50, followed by Adani Portswhich jumped 9.19 per cent to ₹1,532. Jio Financial Services climbed 8.15 per cent to ₹264, Bajaj Finance advanced 6.67 per cent to ₹964, and InterGlobe Aviation gained 5.57 per cent to ₹4,948. “Adani Group stocks attracted buying on hopes of gains from stronger energy trade ties and infrastructure opportunities linked to deeper bilateral relations,” noted Bajaj Broking in its market commentary.
Only four stocks in the Nifty 50 ended in the red, with Tech Mahindra leading losses with a marginal decline of 0.66 per cent to ₹1,712.70, followed by Bharat Electronics (-0.16 per cent to ₹438.40), SBI Life Insurance (-0.08 per cent to ₹1,999.40), and Nestle India (-0.07 per cent to ₹1,307.40).
The Indian rupees strengthened sharply, appreciating by ₹1.28 or nearly 1.40 per cent following the trade deal announcement. “At present, USDINR is quoting near 90.25. The immediate resistance for the rupee is seen around 89.90, while 90.50 now acts as an important base support,” Trivedi added.
Despite the strong opening, both indices witnessed sharp intraday volatility. “The Nifty opened over 1,200 points higher but saw sharp volatility in early trade. After correcting around 700 points from the high of 26,341.20, it found support near 25,641 and rebounded 223 points to close at 25,727, indicating buying at lower levels,” said Hitesh Tailor, Research Analyst at Choice Equity Broking. The India VIX declined 7 per cent to 12.89, signaling easing market anxiety.
“This materially improves the competitiveness of Indian exports in the US and is likely to lift market sentiment, with a multi-layered positive impact on the economy and export-facing sectors,” said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services. “Key beneficiaries include Auto Ancillaries, Defence, Textiles, EMS, Consumer Durables, IT Services, and Utilities, while Financials could see second-order gains through improved growth visibility.”
In commodities, gold and silver showed early signs of stabilization after last week’s selloff. “Gold and silver are showing early signs of stabilization after last week’s historic selloff, with both metals rebounding modestly as investors reassess whether the downturn was structural or simply an overshoot,” said Hareesh V, Head of Commodity Research, Geojit Investments.
Looking ahead, market participants expect continued positive momentum in the near term. “With the deal-related uncertainty now being lifted, we believe that multiple positives will accrue in the form of reversal of FII outflows, INR recovering its lost ground and general improvement in sentiments towards Indian equities,” Khemka said. However, analysts cautioned that holding the 25,400-25,500 zone will be critical for the Nifty, with the upcoming RBI monetary policy announcement likely to keep volatility elevated.
Published on February 3, 2026