India–US trade deal draws Rs 5236 crore in FII inflow; DIIs net buy Rs 1014 crore worth of equities on February 3

With tariffs on Indian goods now lower than or broadly in line with competitors such as Pakistan and Vietnam in labour-intensive segments, Jefferies said the deal improves India’s positioning and reduces the risk of further FPI outflows.

• FIIs bought Rs 5,236 crore in Indian stocks post India-US trade deal news.
• Sensex surged 944 points, Nifty climbed 263 points as markets rebounded strongly
• US agreed to reduce tariffs on Indian imports, boosting export competitiveness

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After the announcement of the India-US trade deal during the late hours of February 2, Foreign investors (FIIs/FPIs) reacted positvely on February 3, net buying Rs 5,236 crore worth of Indian equities, the highest single day inflow in 2026 and the highest in three months. At the same time, domestic institutional investors (DIIs) net bought shares worth Rs 1014 crore, according to provisional exchange data.

Prior to today's flows, the highest single day inflows from FIIs were seen on October 28 where FII's net bough nearlt Rs 10,000 crore in equities. This came amidst the final day of subscription for Groww's mega's Rs 6,000 crore IPO, followed by November 7 where FIIs net bought around Rs 4,000 crore during the MSCI rebalancing.

During the trading session, DIIs purchased shares worth Rs 28,206 crore and sold shares worth Rs 27,192 crore. On the other hand, FIIs bought shares worth Rs 27,678 crore but sold shares worth Rs 22,441 crore.

For the year so far, FIIs have been net sellers of shares worth Rs 37,827 crore, while DIIs have net bought shares worth Rs 71,992 crore.

Market view

On February 3, the benchmark BSE Sensex jumped 2.54% to 83,739.13, while the NSE Nifty 50 index advanced 2.55% to 25,727.55, after a long-awaited India–US trade deal removed a key market overhang.

Most NSE sectoral indices were firmly in the green, led by realty (up nearly 4.8 percent), infrastructure, energy, pharma, and banking. Defensive FMCG stocks lagged but remained positive, while IT stocks posted more moderate gains compared with cyclicals.

Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services noted that Indian Equities witnessed one of the biggest single-day gains on Tuesday after India and US announced a long-awaited trade deal, easing tariff-related concerns that have weighed on Indian markets since April 2025. "There was widespread optimism in the market as the US agreed to reduce the reciprocal tariff on Indian imports from 25% to 18% and fully withdraw the additional 25% punitive levy linked to Indo-Russian oil trade, implying a sharp 32% reduction in the overall tariff burden. This materially improves the competitiveness of Indian exports in the US and is likely to lift market sentiment, with a multi-layered positive impact on the economy and export-facing sectors."

With the deal-related uncertainty now being lifted, Khemka noted that they believe that multiple positives will accrue in the form of reversal of FII outflows, INR recovering its lost ground and general improvement in sentiments towards Indian equities. "We expect Indian markets to witness continued positive momentum in the near term, with sector/stock specific action, driven by recent trade deals (US and EU), Union Budget announcements and the ongoing Q3 earnings season," he said.