Sensex Jumps 2,500 Points: India-US Trade Deal Sparks Historic Rally

February 3, 2026 — The Indian stock market witnessed a historic “super-Tuesday” as the benchmark BSE Sensex surged by a staggering 2,500 points in early trade, reclaiming the 84,000 level. This massive rally has wiped out the “Budget-day blues” from earlier this week, fueled by a transformative geopolitical breakthrough that has fundamentally altered India’s export landscape.

The Catalyst: A “Game-Changer” Trade Pact

The primary engine behind today’s vertical climb is the sudden finalization of a long-awaited India-US trade agreement. Late Monday night, US President Donald Trump announced that Washington would slash tariffs on Indian goods from a prohibitive 50% down to 18%, effective immediately.

In exchange, India has reportedly agreed to:

• Halt oil purchases from Russia, aligning more closely with US energy interests.
• Lower trade barriers for American technology, agriculture, and energy products.
• Increase procurement of US-made goods to a targeted $500 billion over several years.

Market analysts are calling the deal a “once-in-a-decade pivot.” Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the tariff reduction is a “game-changer” that could push India’s GDP growth toward 7.5% in the coming fiscal year.

Sectoral Performance: Winners Everywhere

The rally was broad-based, with the Nifty 50 also gaining nearly 3% to cross the 26,000 mark.

The Indian Rupee also joined the party, strengthening sharply to 90.40 against the US Dollar, reflecting renewed confidence and expected capital inflows.

Moving Past the Budget Hangover

The surge comes as a massive relief following Sunday’s volatile special session. While the Union Budget 2026-27 initially spooked investors with a hike in the Securities Transaction Tax (STT), the focus has now shifted to the government’s aggressive ₹12.2 lakh crore capital expenditure target.

Between the growth-oriented domestic budget and the newfound ease of global trade, investors are increasingly looking at 2026 as a year of “animal spirits” returning to the Indian economy.

What to Watch Next

While the mood is celebratory, some caution remains. Investors will be closely watching for the fine print of the India-US deal, particularly the timeline for phasing out Russian oil and the specific sectors where India will lower its own import barriers.