Bajaj Broking: February 3rd, domestic benchmarks logged a sharp relief rally, with the BSE Sensex jumping 2.54% to 83,739.13 and the NSE Nifty 50 advancing 2.55% to 25,727.55, after the long-pending India–US trade pact cleared a key macro-overhang and triggered broad-based risk-on sentiment.

The US will cut reciprocal tariffs on Indian goods to 18%, while India will lower trade barriers and increase imports from the US, with PM Modi calling the deal a boost for “Made in India” exports and long-term strategic ties. Adani Group stocks attracted buying on hopes of gains from stronger energy trade ties and infrastructure opportunities linked to deeper bilateral relations.

Midcap and small-cap indices outperformed, with both gaining nearly 3%, reflecting strong broad-based participation. Most sectoral indices ended higher, with realty leading the gains at nearly 4.8%, followed by infrastructure, energy, pharma and banking, while FMCG rose modestly and IT lagged other sectors.

Nifty Outlook 

The index formed a bear candle (as close was below the open) with a sizable bullish gap ( 25108-25641) below its base signaling profit booking at higher levels after a strong opening on the weekly expiry trade.

Index has immediate support at 25450 levels being the confluence of the last week high and 20 days EMA. Nifty holding above the support area will keep the bias positive and will open upside towards 26,000 and 26350 levels in the coming sessions. Volatility is likely to remain elevated amid uncertain global cues and the upcoming RBI monetary policy announcement. Key short-term support is placed in the 25,100–24,800 zone being the confluence of the 52-week EMA and the bullish gap area of Tuesday.

Bank Nifty Outlook

Bank Nifty formed a bear candle (as close was below the open) with a sizable bullish gap ( 58687-59793) below its base signaling profit booking at higher levels after a strong opening. Index has immediate support at 59500-59200 levels being the confluence of the 20- and 50-days EMA. Index holding above the support area will keep the bias positive and will open upside towards 60,800 and 61,700 levels in the coming sessions. Volatility is likely to remain elevated amid uncertain global cues and the upcoming RBI monetary policy announcement. Key short-term support is placed in the 58,500–58,000 zone being the confluence of the 100 days EMA and the bullish gap area of Tuesday.

Also Read: Expect a Positive Chain Reaction Says MOFSL

Motilal Oswal Financial Services Ltd 

Indian Equities witnessed one of the biggest single-day gains on Tuesday after India and US announced a long-awaited trade deal, easing tariff-related concerns that have weighed on Indian markets since Apr’25. Nifty50 opened over 1200 points higher and closed with gains of 639 points at 25,728 (+2.6%). Broader market indices Nifty Midcap100 and Smallcap100 jumped nearly 3% each. There was widespread optimism in the market as the US agreed to reduce the reciprocal tariff on Indian imports from 25% to 18% and fully withdraw the additional 25% punitive levy linked to Indo-Russian oil trade, implying a sharp 32% reduction in the overall tariff burden. 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.

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. India's tariff rate is now lower than that of several major export-oriented Asian economies, with Bangladesh, Sri Lanka, Taiwan, and Vietnam having a 20% tariff while imports from Indonesia, Malaysia, Thailand, Philippines and Pakistan facing 19% tariffs. 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. Thus, MOFSL expects Indian markets to witness continued positive momentum in the near term, with sector/stock specific action, driven by recent trade deals (US and EU), Union Budget announcements and the ongoing Q3 earnings season.