Ponmudi R, CEO, Enrich Money, said: Indian equity markets continue to draw support from positive progress in India-US trade talks, which remain the key sentiment driver. A better understanding of risks to foreign trade has revived confidence and renewed interest in export-oriented sectors. “Following the strong multi-day rally, some profit booking and range action cannot be ruled out. That said, easing global uncertainties, continued domestic capex momentum and a stable macro environment mean that the near to medium term outlook remains constructive. The early signs of renewed FII participation on trade-related optimism further adding to the positive undertone. The direction of the market today will largely depend on whether new follow-on buying emerges or whether the indices pause to move higher levels,” he said.
Nachiketa Sawrikar, Fund Manager, Artha Bharat Global Multiplier Fund, said: The India-US relationship, which many expected to strengthen during President Trump’s second term, hit a new low in June. For the world at large, the strained ties between the two largest democracies were hardly good news. “Against this backdrop, the new India-US trade deal, which reduces the average tariff to around 18% from the earlier punitive 50%, marks a meaningful reset in bilateral economic ties.
For India, lower tariffs improve access to the U.S. market for labor-intensive exports such as textiles, engineering goods and pharmaceuticals, supporting employment and production scale. The 18% figure broadly puts India on par with its ASEAN countries and represents the best outcome that is realistically achievable. For the US, the agreement creates opportunities to expand exports of energy, agricultural products and advanced technologies, while strengthening supply chain diversification away from over-concentrated geographies,” he said.
Rajeev Sharan, Head – Criteria, Model Development & Research, said: India’s trade deal with the US significantly reduces external uncertainty and strengthens favorable growth prospects by boosting exports alongside rising domestic investments. “The deal should facilitate equity selling by the FPI as visibility of sectoral gains improves. By anchoring the rupee, this will put modest pressure on gold and silver prices locally, even as global safe-haven demand persists,” he added.
According to Sawrikar, the deal, apart from the tariffs, signals renewed strategic confidence. “With the rupee weakening nearly 5% over the past six months, improved trade flows and renewed interest from foreign investors could support a partial currency recovery. With relative attractiveness shifting from ASEAN markets back to India, a reversal of recent FII outflows could further strengthen Indian equity markets,” he added.
Meanwhile, most stocks in the Asia-Pacific region fell in early deals on Wednesday.
Published on February 4, 2026
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