The Indian stock market recorded one of its biggest rallies in the recent past during Tuesday’s trading session on February 03, as the much-awaited trade deal between the US and India was finally sealed, significantly lowering tariffs on Indian goods.
The development boosted investor sentiment, triggering a broad-based buying spree across segments, with export-oriented sectors emerging as the biggest beneficiaries. Optimism also spilled over into capital market stocks, which had seen a sharp sell-off following the unexpected announcements in the Union Budget 2027.
The Nifty 50 surged 639 points, or 2.55%, to 25,727, marking one of its best intraday performances in recent history, while the S&P Sensex jumped 2,259 points, or 2.54%, to settle at 83,739. Broader markets closed with even sharper gains, with the Nifty Midcap 100 and Nifty Smallcap 100 each rallying nearly 3%.
Not just equities, the Indian rupee also got a boost, surging over 1% to 90 against the US dollar and logging its biggest intraday gain in a year.
US President Donald Trump on Monday announced a reduction in reciprocal tariffs on Indian goods to 18% from 25% after holding a conversation with Prime Minister Narendra Modi.
The US president is also reportedly removing an additional punitive 25% duty that was applied in response to India’s purchases of crude oil from Russia, removing a major overhang on the Indian stock market that had weighed on investor sentiment for several months.
Export-heavy sectors outperform as tariff relief boosts earnings visibility
Today’s broad-based rally was led by textiles, chemicals, and auto ancillary stocks, as these sectors are expected to benefit the most due to their sizeable exposure to the US.
Welspun Living shares closed with a 20% surge at ₹146.6 apiece. Other textile stocks such as KPR Mill, Vardhman Textiles, Trident, and Welspun Corp also ended the session with gains of up to 15%.
Auto ancillary stocks including Balkrishna Industries, Tube Investments of India, Jyoti CNC Automation, Samvardhana Motherson International, and Sona BLW Precision Forging rallied between 6% and 12%.
Meanwhile, stocks in the chemicals space also witnessed strong buying interest. Aarti Industries jumped 15.2% to ₹429.7 per share, while PCBL Chemical, Gujarat Fluorochemicals, and Navin Fluorine International gained 12%, 8%, and 6.5%, respectively.
Capital markets stocks have also regained strength, with CDSL surging 9%, while others, such as Angel One, Nippon Life India AMC, BSE UTI Asset Management, and MCX, also gained between 8% and 5%.
Earnings disappointment and stock-specific concerns weigh on select counters
Even amid a broad-based surge, some stocks failed to participate in the rally, with PB Fintech emerging as the top laggard, falling 6.5% to ₹1,462 apiece.
Aegis Vopak Terminals shares shed 4% to ₹223.6 apiece, while Varun Beverages declined 3.3% to ₹451 per share, as investors appeared disappointed with the company’s December-quarter performance.
Ola Electric shares ended 2.5% lower at ₹31 apiece. Other stocks such as Global Health, NMDC Steel, Aster DM Healthcare, Action Construction Equipment, and Olectra Greentech also closed 2% to 2.5% lower.
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