Investor wealth surges as reduction in US reciprocal tariffs sparks heavy buying across sectors, with export-oriented stocks emerging as key gainers.
TFP Bureau, Mumbai, February 3: Indian equity markets witnessed a sharp rally on Tuesday morning, with benchmark indices posting their strongest opening gains in recent months, buoyed by firm cues from Asian markets and renewed investor optimism following the announcement of a long-awaited India–US trade agreement.
The 30-share BSE Sensex opened sharply higher at 85,323 points and quickly extended its gains in early trade. By 9:22 am, the index was trading at 84,158.52 points, registering a robust jump of 2,492.06 points. The broader National Stock Exchange (NSE) Nifty-50 also began the session on a strong note, opening at 26,308 points. At 9:23 am, it was trading at 25,849.10 points, up by 760.70 points, crossing the psychologically significant 25,700 mark during early deals.
Market sentiment received a major boost after US President Donald Trump on Monday officially announced the much-anticipated trade agreement between India and the United States. Under the agreement, the reciprocal tariff imposed on Indian goods has been reduced from 25 per cent to 18 per cent, providing significant relief to Indian exporters and easing long-standing trade-related uncertainties.
Commenting on the market reaction, An Expert of Equity Research Analyst and Fund Manager said the historic trade agreement has largely removed uncertainty that had been weighing on Indian equities. “This development has brought a visible shift in the mindset of global investors. Foreign investors who had earlier stayed away from Indian markets due to fears of higher tariffs are once again viewing India positively,” he said.
Experts said export-oriented sectors are expected to be the biggest beneficiaries of the deal. Stocks related to IT services, textiles and apparel, auto components, engineering goods, specialty chemicals, agricultural and seafood exports, as well as select electronics and consumer manufacturing companies with a presence in the US, witnessed strong buying interest in early trade. These sectors, which had been bracing for higher tariffs, are now likely to see improved earnings visibility and enhanced global competitiveness.
The positive sentiment also translated into a sharp rise in investor wealth. The total market capitalisation of companies listed on the BSE surged to ₹4,66,96,845 crore in early trade, compared to ₹45,43,562.8 crore at the close of trading on Monday, reflecting a substantial single-day increase.
Market participants said the combination of supportive global cues, easing trade tensions with the US and expectations of improved export performance has created a favourable environment for equities in the near term. Analysts, however, advised investors to remain selective and track global developments closely, even as the broader outlook has turned decisively positive following the landmark trade announcement.
