Pre-Market: Sensex Rallies 2,072 Pts, FIIs Buy ₹5200 Cr After India–US Trade Deal

Indian equity markets head into Wednesday’s session after a strong rally on Tuesday, when benchmarks closed more than 2% higher, supported by broad-based buying following the India–US trade deal announcement and supportive global cues. The move followed a volatile stretch after the Union Budget.

Yesterday’s Market Recap

Benchmarks ended the day sharply higher after opening with strong gains.

• The BSE Sensex jumped 2,072.67 points, or 2.54%, to close at 83,739.13.

• The NSE Nifty 50 rose 639.15 points, or 2.55%, settling at 25,727.55.

The rally began at the open. Nifty 50 started trading at 26,308.05, up 1,219.65 points, while the Sensex surged 3,656.74 points at the opening bell to 85,323.20.

Gains moderated through the session but remained strong till the close. All sectoral indices finished in the green.

Trade Deal Lifts Sentiment Across Markets

The announcement of a trade agreement between India and the United States was the main trigger for the rally.

Under the agreement, the US will cut reciprocal tariffs on Indian goods from 25% to 18%. In response, India would eliminate all tariffs and non-tariff restrictions on US goods.

The announcement increased market appetite for risk. Buying activity was seen in export-orientated industries, and overall confidence improved following recent budget-related uncertainties.

Global cues were also encouraging. Overnight, US equities finished higher, boosted by technology firms, while Asian markets saw gains.

Broad-Based Sectoral Buying

Buying was witnessed throughout industries on Tuesday. Leading the increases were Nifty Realty, Nifty Metals, Nifty Pharma, and Nifty Chemicals.

During the session, inventories related to capital goods, textiles, and other exports also saw increases. The market capitalisation of BSE-listed companies rose by more than ₹12 lakh crore during the session.

FII Activity and Volatility

Foreign investors returned to the buying side amid continuous selling. Foreign Institutional Investors (FIIs) were net buyers of more than ₹5,200 crore on 3 February, pointing to renewed overseas interest after recent selling.

Volatility eased further. The India VIX fell 7.07% to 12.89, extending the cooling seen after the Budget-day spike.

Global Cues and GIFT Nifty

Overseas markets remained mixed but supportive yesterday.

• The S&P 500 traded near 6,945.67, down 0.44%

• The Dow Jones rose 0.77% to around 49,445.46

• Japan’s Nikkei 225 jumped 3.92% to 54,720.66

• Hong Kong’s Hang Seng was nearly flat at 26,834.77

Early offshore signals were slightly cautious. GIFT Nifty was trading at 25,825, down 42 points or 0.16% at the time of writing, after Tuesday’s sharp move.

What Should We Expect in Today’s Market?

After a strong up-move, attention is likely to shift to whether gains are consolidated. Traders will continue to track developments around the India–US trade deal, global market direction, and institutional activity.

With volatility easing and sentiment improving, the focus may turn stock-specific, especially around sectors that saw outsized moves in the previous session.

The markets that were having trouble finding a direction are likely at a turning point, with the bear market most likely coming to an end.

Although the specifics are still unknown, by analysing Trump's tweet, the budgetary provisions, the India-EU Free Trade Agreement, and the India-New Zealand Free Trade Agreement, investors may get a reasonable preliminary idea.

Sources:

Mint

Google Finance

NSE

BSE

Moneycontrol

Economic Times