Sensex Surges 3,600 Points, Nifty Jumps 1,200 As India-US Trade Deal Slashes Tariffs

Updated: Tuesday, February 3, 2026, 11:17 [IST]

Indian equity markets staged a sharp turnaround on Tuesday morning, swinging strongly higher just 48 hours after being battered by the Union Budget. The rebound came after confirmation of the long-pending India-US trade agreement, which helped restore investor confidence following days of intense volatility.

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Indian equity benchmarks surged in early trade on Tuesday after India and the U.S. announced a trade agreement, wherein the U.S. agreed to slash tariffs on Indian goods to 18% and India will halt purchases of Russian oil. The Nifty jumped nearly 750 points and the Sensex surged around 2,400 points.

Markets Reverse Budget Losses With Massive Gap-Up Opening

The Sensex opened more than 3,600 points higher to cross the 85,000 mark, after having closed at 81,666.46 on Monday. The Nifty50 also saw a powerful recovery, jumping nearly 1,200 points from its previous close of 25,088.40, as heavy buying returned across sectors.

The rally followed an announcement by US President Donald Trump, who confirmed that Washington and New Delhi had agreed on a trade deal. Trump shared the update on his social media platform Truth Social, stating that US tariffs on Indian goods would be slashed to 18 per cent from 50 per cent in exchange for India halting purchases of Russian oil and lowering trade barriers.

Prime Minister Narendra Modi responded soon after, saying, "Big thanks to President Trump on behalf of the 1.4 billion people of India for this wonderful announcement".

Sectoral Indices Surge, Early Gains Partly Trimmed

At the opening bell, all sectoral indices were firmly in the green, reflecting broad-based buying interest. Realty stocks led the rally with gains of 4.47 per cent, followed by auto stocks up 3.78 per cent, consumer durables rising 3.69 per cent, and IT stocks advancing 3.04 per cent.

As the session progressed, markets pared some of their early gains. By around 10 am, the Sensex was still up over 2,200 points, while the Nifty held gains of nearly 650 points, indicating continued strength despite some profit booking.

Rupee Strengthens Sharply Against US Dollar

The positive sentiment also spilled over into the currency market. The Indian rupee strengthened 1.2 per cent to trade at 90.40 against the US dollar in early trade, supported by expectations of improved trade flows and potential foreign investor inflows following the deal.

Currency traders noted that the trade agreement could ease external pressures and improve confidence in India's macroeconomic outlook.

Volatility Persists After Eventful Week for Markets

Indian stock markets have witnessed sharp swings over the past week. The volatility began after benchmark indices erased overnight losses following the announcement of a Free Trade Agreement with the European Union, before coming under pressure again after the Union Budget.

Tuesday's rally highlights how quickly sentiment has shifted, with investors now reassessing India's growth and trade prospects in light of the India-US agreement. Markets are expected to remain sensitive to global cues and policy developments in the sessions ahead.

Article Corrections

The article has been updated to reflect a much sharper market rebound following the India-US trade deal, with opening gains revised to over 3,600 points on the Sensex and nearly 1,200 points on the Nifty. It now includes details of the strong gap-up opening after losses triggered by the Union Budget, sector-wise gains across realty, auto, consumer durables and IT stocks, intraday moderation by mid-morning, a stronger rise in the rupee, and added context on recent market volatility linked to global trade developments.