Market Snapshot

The Indian stock market witnessed one of its most explosive sessions in recent history on Tuesday, February 3, 2026. The BSE Sensex settled at 83,739.13, up a staggering 2,072.67 points or 2.54%, while the NSE Nifty 50 zoomed 639.15 points or 2.55% to close at 25,727.55. The day's euphoria was sparked by the announcement of a "reciprocal" trade deal between India and the U.S., which slashed tariffs on Indian exports to 18% from previous highs of 50%. The market capitalization of all BSE-listed companies surged by over ₹12 lakh crore in a single day, reflecting the widespread optimism.

Institutional Flows: Cash Market

Provisional data for February 03, 2026, indicates a dramatic shift in institutional sentiment. After months of relentless selling, Foreign Institutional Investors (FIIs) turned net buyers, providing the much-needed liquidity to fuel the gap-up opening and subsequent rally.

• Foreign Institutional Investors (FIIs): Net buyers of approximately ₹3,840.50 crore in the cash segment.
• Domestic Institutional Investors (DIIs): Continued their supportive stance with net buying of ₹1,215.20 crore.

This marks a significant reversal for FIIs, who had offloaded over ₹41,000 crore in January 2026. Analysts suggest that the clarity on trade relations with the U.S. has removed a major geopolitical overhang, prompting a re-allocation of funds back into Indian emerging markets.

Derivatives Market Activity

The F&O segment reflected intense short-covering and fresh long positioning. FIIs were seen aggressively covering their short positions in Nifty and Bank Nifty futures, which had been built up during the pre-budget uncertainty.

• Index Futures: FIIs turned net buyers in index futures, with a significant increase in Open Interest (OI) in the Nifty February series.
• Index Options: Call buying was rampant in the 26,000 and 26,500 Nifty strikes, indicating expectations of further upside.
• Volatility: The India VIX cooled significantly, dropping nearly 8% to settle around the 13.8 level, suggesting a decrease in perceived market risk.

Key Drivers and Outlook

The primary catalyst for the day's "blockbuster" performance was the India-US trade deal. Under the agreement, Washington reduced reciprocal tariffs on Indian goods to 18%, a move expected to benefit export-oriented sectors like textiles, pharmaceuticals, and chemicals.

• Sectoral Performance: Nifty Realty was the top gainer, surging over 4%, followed by Nifty IT and Nifty Pharma, both gaining more than 3%.
• Currency Boost: The Indian Rupee (INR) appreciated by 122 paise to settle at 90.27 against the US Dollar, its strongest single-day performance since 2018.
• Corporate Earnings: Strong Q3 results from heavyweights like Adani Enterprises (which saw a 97-fold jump in PAT) and Adani Ports further fueled the rally.

Looking ahead, the market appears poised to test its all-time highs of 86,159 for the Sensex. While the immediate trigger is the trade deal, the sustainability of this rally will depend on consistent FII inflows and the upcoming RBI monetary policy committee (MPC) meeting. Investors are advised to remain focused on quality export-linked stocks and large-cap banks as the "trade deal boom" unfolds.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: FII DII Stock Market Institutional Investors Nifty Sensex

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