Indian Stocks Rally as Investors Cheer U.S. Trade Deal

Dow Jones Newswires

By Kimberley Kao

Indian stocks rallied after President Trump said the U.S. has agreed to slash tariffs on India, soothing investor concerns after months of uncertainty about progress in negotiations.

Shares of major Indian companies rallied Tuesday, reflecting relief that a key overhang has been removed. Late last year, most Asian economies negotiated for lower tariffs on their U.S.-bound goods, but India got hit with an additional levy over its purchases of Russian oil.

In a post on Truth Social on Monday, Trump said he and Indian Prime Minister Narendra Modi agreed to a trade deal under which the U.S. would cut the so-called reciprocal tariff on India to 18% from 25%.

Trump also said Modi "agreed to stop buying Russian Oil, and to buy much more from the United States," a commitment a White House official said means the 25% penalty levied on India over Russian oil will be dropped.

Analysts say the move will remove a key overhang for markets and is likely to benefit textiles, gems & jewellery, manufacturing, auto, leather and chemicals sectors.

On Tuesday, India's benchmark Sensex index opened 4.5% higher before paring gains.

Adani Ports & Special Economic Zone jumped 7.0%, Bajaj Finance added over 6% and Reliance Industries rose more than 4%.

Shares of textile and apparel manufacturers surged, with KPR Mill and Gokaldas Exports up 20% each, while Welspun Living was 18% higher and Arvind Ltd. added 12%.

IT firms Infosys and Wipro were up about 2% each, tracking gains in U.S.-listed shares on Monday.

Citi Research analysts say Indian banks should benefit from relief over the deal too, as they have exposure to export-oriented sectors.

Financial firms were trading broadly higher in India on Tuesday.

For Radhika Rao, senior economist at DBS Group Research, the deal is "unmistakably positive" for India's economy and financial markets, as high tariffs had been a key drag on sentiment over the past quarter.

The announced reduction effectively takes India's tariff rate close to that of most Southeast Asian countries and puts it at an advantageous position versus China, Rao said.

U.S. trade policy had been weighing on the rupee too, helping drive it to record lows versus the dollar, and the Indian currency strengthened following news of the deal.

However, initial relief could give way to some misgivings, as details of the pact remain unclear. The impact of India's pivot away from Russian crude is also uncertain, analysts say.

Focus will be on how the agreement is executed: what products are covered, timelines and enforcement, said Charu Chanana, chief investment strategist at Saxo Singapore.

Particular attention will be on whether the oil pledge will raised India's import bill, feeding through into inflation and the rupee's performance, she said.

"We also need to see the details & implications of India bringing down its tariffs [which] could have negative implications for some sectors," Citi Research analysts said in a note.

Write to Kimberley Kao at kimberley.kao@wsj.com

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India-US Trade Deal: Stocks that take the spotlight on Tuesday

CNBC TV18

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India and the US have agreed to a trade deal after months of negotiations with the overall tariff rate coming down to 18% from 50% that was in place till date. This puts all the export oriented names in the spotlight for Tuesday's trading session. Here's a look at some of them:

Textile Stocks | Textile stocks such as Gokaldas Exports, Welspun Living, KPR Mill were the worst hit due to the tariffs, as 50% to 70% of their revenue came from the US market. The reduction of tariff to 18% puts them at a better tariff rate compared to other garment rivals such as Bangladesh and Vietnam, who are both taxed at 20%.

Shrimp Exporters | The US was the biggest market for Shrimp exporters and while they did manage to find other avenues for their products, particularly the European Union and China, the US remains their biggest destination. Stocks such as Avanti Feeds, Apex Frozen Foods, among others will be beneficiaries of this announcement.

IT Stocks | While services were never in the line of tariffs during these negotiations. the stocks were impacted first due to the H-1B negotiations and then surged as the currency kept depreciating to new lows due to lack of clarity on the trade deal front. A weaker rupee translates into better margins for the IT companies, but with the currency most likely to strengthen on Tuesday after the announcement, it remains to be seen how stocks like TCS, Infosys, HCLTech, Persistent Systems, and Coforge, react to this announcement.

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Bharat Forge | The company has significant exposure to the Class 8 truck market in the US and the reduction of tariffs would be a positive for the stock. In addition to CVs, the company also has a defence vertical and with the US-India defence partnership continuing, the street will be hoping that it translates into more export orders for the company.

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India stocks higher at close of trade; Nifty 50 up 1.06%

Investing.com

Investing.com – India stocks were higher after the close on Monday, as gains in the Power, Auto and Oil & Gas sectors led shares higher.

At the close in NSE, the Nifty 50 gained 1.06%, while the BSE Sensex 30 index climbed 1.17%.

The best performers of the session on the Nifty 50 were Power Grid Corporation of India Ltd (NSE:PGRD), which rose 7.36% or 18.50 points to trade at 269.85 at the close. Meanwhile, Tata Motors Passenger Vehicles Ltd (NSE:TAMO) added 5.64% or 19.45 points to end at 364.10 and Adani Ports and Special Economic Zone Ltd (NSE:APSE) was up 4.28% or 57.60 points to 1,402.50 in late trade.

The worst performers of the session were Shriram Finance Ltd. (NSE:SHMF), which fell 3.17% or 31.60 points to trade at 966.00 at the close. Axis Bank Ltd (NSE:AXBK) declined 2.28% or 30.50 points to end at 1,309.90 and Infosys Ltd (NSE:INFY) was down 1.66% or 27.50 points to 1,627.00.

The top performers on the BSE Sensex 30 were Power Grid Corporation of India Ltd (BO:PGRD) which rose 7.55% to 270.00, Tata Motors Passenger Vehicles Ltd (BO:TAMO) which was up 5.52% to settle at 363.50 and Adani Port and Special Economic Zone Ltd (BO:APSE) which gained 4.61% to close at 1,401.00.

The worst performers were Infosys Ltd (BO:INFY) which was down 2.07% to 1,625.30 in late trade, Axis Bank Ltd. (BO:AXBK) which lost 2.00% to settle at 1,311.60 and Tata Consultancy Services Ltd. (BO:TCS) which was down 0.52% to 3,168.45 at the close.

Falling stocks outnumbered advancing ones on the India National Stock Exchange by 1301 to 1193 and 45 ended unchanged; on the Bombay Stock Exchange, 2130 fell and 1902 advanced, while 166 ended unchanged.

The India VIX, which measures the implied volatility of Nifty 50 options, was down 8.69% to 13.78.

Gold Futures for April delivery was down 0.89% or 42.01 to $4,703.09 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March fell 4.83% or 3.15 to hit $62.06 a barrel, while the April Brent oil contract fell 4.54% or 3.15 to trade at $66.17 a barrel.

USD/INR was down 0.17% to 91.51, while EUR/INR fell 0.05% to 108.60.

The US Dollar Index Futures was up 0.09% at 96.95.

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Trade Spotlight: How should you trade Max Healthcare, LTIMindtree, Aster DM, PFC, Jindal Steel, and others on February 2?

Moneycontrol

Infosys

-3.35%

The benchmark indices succumbed to selling pressure following the Union Budget announcement, falling nearly 2 percent on February 1, with weakness visible in market breadth. A total of 1,940 shares declined, against 953 advancing shares on the NSE. The market may consolidate near the previous day’s low after the sharp correction. Below are some short-term trading ideas to consider:

Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities

Infosys | CMP: Rs 1,654.3

The primary trend of Infosys remains bullish, with the stock forming higher tops and higher bottoms. Infosys is trading above all key moving averages, and the IT sector has shown resilience during the recent market fall.

Strategy: Buy

Target: Rs 1,780

Stop-Loss: Rs 1,600

Max Healthcare Institute | CMP: Rs 976.7

Max Healthcare has formed a double bottom reversal pattern near Rs 940. The stock has closed above its 5-day EMA, while the daily RSI has exited the oversold zone, indicating a potential bullish trend reversal.

Strategy: Buy

Target: Rs 1,100

Stop-Loss: Rs 940

Aditya Birla Capital | CMP: Rs 329.2

Aditya Birla Capital has breached crucial support levels of its 20- and 50-day EMAs with healthy volume. The stock has also broken down from a consolidation pattern. The weekly RSI has exited the overbought zone, confirming a downward reversal. Sell Aditya Birla Capital February Futures.

Strategy: Sell

Target: Rs 310

Stop-Loss: Rs 342

Rupak De, Senior Technical Analyst at LKP Securities

LTIMindtree | CMP: Rs 6,070.5

LTIMindtree has delivered a consolidation breakout on the daily chart, indicating rising optimism around the counter. The sector looks favourable for the short to medium term, as post-Budget, IT remains the only sector holding on to its gains. Additionally, the stock has closed above the 20-day DMA, confirming a positive bias. Based on the technical setup, the stock could move toward the Rs 6,400–6,600 zone, while on the downside, support is placed at Rs 5,900.

Strategy: Buy

Target: Rs 6,400, Rs 6,600

Stop-Loss: Rs 5,900

Aster DM Healthcare | CMP: Rs 570.40

Aster DM Healthcare appears to be forming a base ahead of a recovery on the daily chart after a sharp correction over the past several weeks. Recently, it found support near the previous congestion zone, strengthening the bullish case. A minor positive divergence is also visible on the daily chart. Overall, the setup points toward a smart recovery in the short term, with potential to move toward Rs 600.

Strategy: Buy

Target: Rs 600

Stop-Loss: Rs 554

Axis Bank | CMP: Rs 1,340.4

Axis Bank has formed a bearish engulfing pattern on the daily chart, indicating waning bullish momentum and the likelihood of additional selling pressure in the short term. Additionally, the RSI has formed a negative divergence near the overbought zone. The trend is expected to remain weak, with potential downside toward Rs 1,270. On the upside, resistance is placed at Rs 1,376.

Strategy: Sell

Target: Rs 1,270

Stop-Loss: Rs 1,376

Jay Mehta, Technical Research at JM Financial Services

NMDC | CMP: Rs 80.38

NMDC broke out above a bullish inverse head-and-shoulders pattern on December 23 from Rs 78.6, rallying to Rs 86.72 before correcting. The pullback found strong support at the 100-day EMA and successfully retested the breakout zone. On January 28, the stock delivered a decisive breakout above a long-term wedge pattern, forming a powerful three white soldiers candle with rising positive volume, confirming accumulation.

The price now trades above all key EMAs with upward slopes. Over the past two sessions, it has retested the wedge breakout zone. Momentum remains bullish, and the structure favours buyers as long as the 100-day EMA holds.

Given the post-Budget sell-off in indices, add positions in a staggered manner and increase exposure only once the price sustains above the Budget day’s high.

Strategy: Buy

Target: Rs 88, Rs 92

Stop-Loss: Rs 76.3

Power Finance Corporation | CMP: Rs 381.5

PFC has broken out above a long-term bullish wedge and sloping channel, supported by strong volumes, indicating solid participation. The stock trades above all key EMAs except the 200-day EMA. In the latest session, following positive Budget 2026 commentary on PFC/REC restructuring, it attempted to break the 200-day EMA but faced some profit booking.

Overall, the bias remains bullish, with higher lows forming and a positive crossover between the 20- and 50-day EMAs. Given the post-Budget sell-off in indices, add positions in a staggered manner and increase exposure only once the price sustains above the Budget day’s high.

Strategy: Buy

Target: Rs 411, Rs 428

Stop-Loss: Rs 356

Jindal Steel | CMP: Rs 1,102

Jindal Steel broke out above its all-time high after consolidating from May 2024 to January 2026, clearing the tough Rs 1,080–1,100 resistance zone (marked multiple times earlier) on strong and rising volumes, indicating genuine participation. The latest session successfully retested the breakout zone without violation.

The stock trades well above all key EMAs with upward slopes, confirming a strong structure. Momentum indicators support a continued bullish bias. Given the post-Budget sell-off in indices, add positions in a staggered manner and increase exposure only once the price sustains above the Budget day’s high.

Strategy: Buy

Target: Rs 1,240, Rs 1,330

Stop-Loss: Rs 1,050

Anand James, Chief Market Strategist at Geojit Investments

Arvind | CMP: Rs 330

Arvind is attempting to form a base near Rs 330 after a strong rebound, creating higher lows within a multi-month range of Rs 305–347. A decisive close above Rs 347 would confirm a range breakout and open up targets of Rs 360–375, while failure near this zone would keep the stock rotational. On the downside, Rs 318–312 remains the immediate support area, followed by a stronger base near Rs 305–297.

Momentum is improving, with the RSI rising above 50 into the 60s and the MACD turning up with a contracting negative histogram, indicating early momentum repair and a developing base.

The technical setup is supported by favourable policy tailwinds from the Union Budget 2026, which announced a five-part, sector-wide push for textiles, covering the National Fibre Scheme, Textile Expansion & Employment Scheme, National Handloom & Handicraft Programme, Text ECON initiative, and SAMARTH 2.0 for skill development. These measures aim to modernise textile clusters, strengthen supply chains, and upgrade workforce capabilities, providing structural medium-term support for integrated textile players like Arvind and reinforcing the stock’s constructive bias on confirmed breakouts.

Strategy: Buy

Target: Rs 360, Rs 375

Stop-Loss: Rs 312

Raymond | CMP: Rs 393.7

Raymond is showing early signs of a short-term turnaround after a sharp corrective phase. On the weekly chart, the stock has formed an inverted hammer, a classic bullish reversal signal when it appears after a decline, indicating rejection of lower levels and emerging buying interest. This pattern suggests that downside momentum may be losing steam, even as the broader trend remains corrective.

Momentum indicators support this view. The MACD histogram is showing clear exhaustion, with negative bars contracting, pointing to waning selling pressure and the possibility of a short-term bounce. While the MACD line remains below the signal line, the improving histogram hints at early stabilisation. The RSI remains subdued but is attempting to base, consistent with a relief rally setup rather than a full trend reversal.

Strategy: Buy

Target: Rs 470

Stop-Loss: Rs 370

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

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Why IT companies are giving a thumbs-up to the Budget

Moneycontrol

Infosys

-3.35%

The budget has provided clarity on buyback which is especially positive for cash rich IT companies that periodically return cash to shareholders.

The Budget proposes that all buybacks will now be taxed as capital gains, replacing the dividend‑like treatment introduced in 2024. To further disincentivise promoters from using buybacks to reduce tax liability, the budget has announced an additional buyback tax on promoters. The change will push the effective tax burden to 22 percent for corporate promoters and 30 percent for non‑corporate promoters.

The buyback overhaul builds on the rules notified from October 1, 2024, which had shifted the tax liability from companies to shareholders. Under those rules, the entire buyback amount was treated as dividend income in the hands of shareholders and taxed at slab rates.

A key provision that remains is the treatment of share acquisition cost. The cost of shares tendered in a buyback will continue to be treated as a capital loss, either short term or long term, depending on the holding period. Investors can set off these losses against other capital gains or carry them forward for up to eight years, providing some relief in the new system. For small shareholders, the shift to capital gains is expected to give clearer tax outcomes and reduce disputes over classification. For promoters, the additional levy aims to correct what the government views as an uneven tax advantage created by the old rules.

The other significant announcement pertains to safe harbour. Safe Harbour rules in India are Income Tax regulations (Section 92CB) that allow taxpayers to adopt pre-defined transfer pricing margins for international transactions, reducing litigation and compliance burdens.

If an assessee opts for safe harbour and their declared price meets the prescribed margin/circumstances, the income-tax authorities will accept it, avoiding transfer pricing audits. Covered transactions include provision of software development services, IT-enabled services, Knowledge Process Outsourcing (KPO), loans to wholly-owned subsidiaries, corporate guarantees, contract R&D, and low-value intra-group services. These rules provide a safe, predetermined framework, allowing companies to avoid lengthy, complex audits.

The budget has clubbed multiple services under a single category of information technology services with a common safe harbour margin of 15.5%. Safe harbour threshold for IT services has been increased from Rs 300 crore to Rs 2,000 crore. Approval of safe harbour for IT services would be an automated rule-driven process and the budget has allowed continuation of safe harbour for a period of five years at the company’s choice.

The overall IT sector would see these developments as positive and would benefit stocks like TCS, Infosys, Wipro etc.

For more research articles, visit our Moneycontrol Research page

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India stocks lower at close of trade; Nifty 50 down 1.96%

Investing.com

Alphabet-A

-1.96%

Infinity Natural Resources Inc.

Investing.com – India stocks were lower after the close on Sunday, as losses in the Public Sector Undertakings, Metals and Capital Goods sectors led shares lower.

At the close in NSE, the Nifty 50 declined 1.96% to hit a new 3-months low, while the BSE Sensex 30 index declined 1.88%.

The best performers of the session on the Nifty 50 were Wipro Ltd (NSE:WIPR), which rose 2.04% or 4.84 points to trade at 241.74 at the close. Meanwhile, Tata Consultancy Services Ltd. (NSE:TCS) added 1.80% or 56.10 points to end at 3,180.00 and Cipla Ltd. (NSE:CIPL) was up 1.44% or 19.00 points to 1,343.00 in late trade.

The worst performers of the session were Bharat Electronics Ltd (NSE:BAJE), which fell 6.12% or 27.50 points to trade at 421.50 at the close. Hindalco Industries Ltd. (NSE:HALC) declined 5.89% or 56.70 points to end at 905.90 and Oil And Natural Gas Corporation Ltd (NSE:ONGC) was down 5.38% or 14.46 points to 254.50.

The top performers on the BSE Sensex 30 were Tata Consultancy Services Ltd. (BO:TCS) which rose 1.77% to 3,180.40, Sun Pharmaceutical Industries Ltd. (BO:SUN) which was up 0.80% to settle at 1,607.75 and Infosys Ltd (BO:INFY) which gained 0.15% to close at 1,642.95.

The worst performers were State Bank Of India (BO:SBI) which was down 5.43% to 1,019.00 in late trade, Adani Port and Special Economic Zone Ltd (BO:APSE) which lost 4.98% to settle at 1,347.00 and Nestle India Ltd (BO:NEST) which was down 4.51% to 1,271.45 at the close.

Falling stocks outnumbered advancing ones on the India National Stock Exchange by 1606 to 874 and 37 ended unchanged; on the Bombay Stock Exchange, 2213 fell and 1696 advanced, while 160 ended unchanged.

The India VIX, which measures the implied volatility of Nifty 50 options, was up 11.65% to 15.22 a new 6-months high.

Gold Futures for April delivery was down 11.39% or 609.70 to $4,745.10 a troy ounce. Elsewhere in commodities trading, Crude oil for delivery in March fell 0.32% or 0.21 to hit $65.21 a barrel, while the April Brent oil contract fell 0.03% or 0.02 to trade at $70.69 a barrel.

USD/INR was down 0.10% to 91.69, while EUR/INR fell 1.10% to 108.66.

The US Dollar Index Futures was up 0.75% at 96.86.

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IT index rises up to 4% from day's low after buyback tax revision in Budget 2026; Wipro, TCS rise up to 3%

Moneycontrol

Wipro

0.00%

The IT index recovered sharply on February 1, rising up to 4 percent from the day’s low after the Union Budget 2026 proposed changes to the taxation of share buybacks.

Nifty IT and consumer durables were the only sectoral indices trading in the green among the 16 major sectors, while the broader market remained under pressure. The benchmark Nifty slipped over 1 percent.

The rebound in IT shares came after the Finance Minister announced that proceeds from share buybacks would be taxed as capital gains instead of being treated as income. In recent years, IT companies have been among the largest users of buybacks to return cash to shareholders.

Shares of Wipro rose as much as 3.6 percent, while Tata Consultancy Services advanced up to 3 percent, emerging as the top gainers in the IT pack.

"This change is a big positive for Indian IT majors like TCS, Infosys and Wipro because it brings back a tax-efficient way to reward shareholders. These cash-rich companies have long relied on buybacks to return surplus capital," Kranthi Bathini, director of equity strategy at WealthMills Securities, said.

The Nifty IT index was flat in January, while the benchmark Nifty declined 3.1 percent during the same period.

"At the margin, another positive for investors is the change in buyback taxation, where gains for minority shareholders will now be treated more like capital gains rather than regular income. This addresses a long-standing investor concern and is incrementally market-friendly," said N ArunaGiri, CEO of TrustLine Holdings.

Under the proposal, buyback proceeds will be taxed as capital gains for all shareholders, ensuring that tax is levied only on the actual economic gain. The move aligns the taxation of buybacks with that of regular share sales and removes the anomaly faced by non-promoter investors.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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