**Market Brief: India–US Trade Deal Sparks Rally** **Date: February 3, 2026** **Market Surge & Sentiment** The confirmation of the India–US trade deal on February 2, 2026, has triggered a massive relief rally across domestic equities. Benchmark indices recorded their best single-day performance in months, with the **Sensex** soaring over **2,000 points (+2.54%)** to close at **83,739**, and the **Nifty 50** surging **640 points (+2.55%)** to settle at **25,727**. Investor confidence has been firmly restored, ending weeks of uncertainty regarding bilateral relations. The deal’s immediate impact was visible in the currency market, where the **Indian Rupee (INR)** appreciated significantly, gaining **122 paise** to close at **90.27** against the US Dollar. **Key Deal Highlights** * **Tariff Reduction:** The US has agreed to cut reciprocal tariffs on Indian goods from **25% to 18%**, a move that directly benefits export-heavy sectors. * **Strategic Commitments:** India has committed to reducing non-tariff barriers and increasing purchases of American energy and technology, signaling a long-term strategic alignment. **Strategic Outlook: JPMorgan’s View** JPMorgan’s Sanjay Mookim notes that while the deal clarifies the tariff landscape and improves sentiment for exporters, the fundamental earnings recovery may not be instant. * **Earnings Caution:** The policy shift improves manufacturing prospects, particularly for sectors like **IT, Pharma, and Textiles**, but earnings upgrades will take time to materialize. * **Large-Cap Focus:** Despite the broad-based rally, Mookim maintains that **large-cap stocks** remain a safer strategic bet over small-cap exporters, offering better resilience as the new trade mechanics stabilize. **Sector Movement** Export-oriented sectors led the charge. **Adani Ports** surged over **9%**, while key players in **Information Technology** and **Pharmaceuticals** saw heavy buying interest, anticipating improved competitiveness under the new tariff regime. The removal of the "tariff overhang" has effectively reset the risk premium for Indian assets.