Mumbai, Feb 3 (PTI) Benchmark stock index Sensex zoomed 2,072 points while the broader Nifty closed above the 25,700 level on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent.

The 30-share BSE barometer closed at 83,739.13, up 2,072.67 points or 2.54 per cent, logging its best single-day gain in the past eight months. The index started the trade on a buoyant note, and later jumped 4,205.27 points or 5.14 per cent to hit the day's high of 85,871.73.

The 50-share NSE Nifty zoomed 639.15 points or 2.55 per cent to settle at 25,727.55. During the day, it surged 1,252.8 points or 4.99 per cent to 26,341.20.

India and the US have agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent from the current 25 per cent, US President Donald Trump said on Monday after a phone conversation with Prime Minister Narendra Modi.

From the 30 Sensex firms, Adani Ports surged 9.12 per cent. The other prominent winners were Bajaj Finance, InterGlobe Aviation, Power Grid, Sun Pharma, Bajaj Finserv and Reliance Industries.

Tech Mahindra and Bharat Electronics were the only laggards.

The trade deal also propelled a sharp rally in textile, leather, gems and jewellery, seafood exports and specialty chemicals stocks.

"Indian equities experienced a significant rally today, driven by the long-anticipated India–US trade deal and a strengthening rupee, which boosted expectations of renewed FII inflows.

"The reduction of US tariffs on Indian goods from 50 per cent to 18 per cent enhances India's competitive position among emerging markets and bolsters the outlook for export-oriented sectors with high US exposure, such as textiles, aquaculture, gems and pharmaceuticals, which were supported in the 2026 Union Budget," Vinod Nair, Head of Research, Geojit Investments Limited, said.

"Indian equity markets staged a sharp rally today, recording one of the strongest single-day gains in recent times after the announcement of a landmark India–US trade deal that significantly reduced reciprocal tariffs on Indian exports," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

Market breadth turned decisively positive, led by export-oriented and commodity-linked sectors such as textiles, chemicals, and auto ancillaries, while financials, realty, pharma, and IT stocks also participated in the upmove, he said.

Mid and smallcap stocks joined the rally on strong risk-on sentiment and short-covering activity, Ponmudi added.

Among indices, services jumped 4.86 per cent, followed by realty (4.79 per cent), power (4.79 per cent), utilities (3.92 per cent), capital goods (3.71 per cent), industrials (3.44 per cent), consumer discretionary (3.06 per cent), metal (2.85 per cent), healthcare (2.83 per cent) and financial services (2.83 per cent).

A total of 3,304 stocks advanced while 981 declined and 137 remained unchanged on the BSE.

"The market has been long awaiting the Indo-US trade deal announcement and the outcome fuelled a mega rally in benchmark and sectoral indices. With India also announcing an FTA deal with the EU last week, the twin trade deals have given a major boost to the markets.

"There is also a sigh of relief after the rupee recouped over 100 paise in a day, which may encourage renewed FII interest in local equities after witnessing continuous outflows over the past few months," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

In Asian markets, South Korea's Kospi rebounded sharply and jumped nearly 7 per cent. Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index also ended higher.

European markets were trading in positive territory.

US markets ended higher on Monday.

Foreign institutional investors offloaded equities worth Rs 1,832.46 crore on Monday, while Domestic Institutional Investors (DIIs) bought stocks worth Rs 2,446.33 crore, according to exchange data.

Brent crude, the global oil benchmark, dropped 0.65 per cent to USD 65.87 per barrel.

On Monday, the Sensex jumped 943.52 points or 1.17 per cent to settle at 81,666.46. The Nifty climbed 262.95 points or 1.06 per cent to end at 25,088.40. PTI SUM MR

India-US trade deal cuts reciprocal tariffs to 18%, boosting exporter competitiveness and sparking a sharp equity rally and midcap gains. A bilateral trade agreement between India and the US reduces the reciprocal tariff on Indian goods to 18 percent, altering tariff incidence and improving competitiveness for export-oriented industries. The tariff change directly boosted equity markets, with strong gains in textiles, leather, gems and jewellery, seafood and specialty chemicals, while mid- and small-cap stocks rallied amid increased risk appetite and expectations of renewed foreign investment following currency strength.