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The Indian equity markets are likely to open higher on February 3 with strong upward movement amid renewed optimism about the recent India-US trade agreement. The GIFT Nifty shows early trading trends that indicate a gap-up opening as the index currently trades at 25,937, with an increase of 795 points from the previous Nifty futures closing.
Market confidence received a boost after US President Donald Trump announced a reduction in reciprocal tariffs on Indian goods to 18% from 25%.
The agreement requires India to reduce all types of barriers that restrict US imports, including both tariff and non-tariff methods.
Analysts view the deal as supportive for export-oriented sectors, manufacturing, and broader economic cooperation, particularly at a time when global trade conditions remain fragile.
Indian benchmark indices experienced a strong bounce back on Monday, with the Sensex closing at 81,666 after climbing 943 points or 1.17%. The Nifty 50 index climbed 263 points or 1.06% to reach 25,088.
The broader markets moved up as the Nifty Midcap increased by 0.96% and the Smallcap index advanced by 0.6%.
The daily charts show that the Sensex formed a bullish candle, whose intraday reversal signals were confirmed.
The 81,200-81,500 range serves as immediate support for the index. The index will attempt to reach 82,200, near the 200-day simple moving average. As long as this zone remains intact, it has the potential to rise further to 83,000.
The short-term momentum will weaken if the price breaks below 81,200.
The Nifty 50 is now testing its 200-day moving average at 25,200, a major resistance level for trend reversal.
The index needs to maintain its current level for it to start moving toward 25,400. Immediate support is at 24,850 and 24,950, with additional protection coming from strong put writing at the 25,000 strike that creates a foundation for support.
The Bank Nifty index rose 0.35% to reach 58,619, yet it remains below key resistance levels.
A sustained move above 58,400 will initiate a pullback toward 58,900-59,10,0 while a decline below 58,100 will bring back downward pressure toward 58,000 and 57,750.
Sectorally, Monday's stock market gains were led by auto, oil and gas, metals, FMCG, infrastructure, and realty stocks, which received support from better demand indicators and falling crude prices. IT stocks experienced losses as global tech spending issues continued to affect the market.
The short-term market tone shows improvement, although actual buying activity will require both global market stability and continuous earnings growth to occur.
