Markets open higher on trade deal boost, banking stocks lead rally

Market Overview - Indian equity markets opened positively, with the Nifty 50 at 25,888.70, up 195 points or 0.76% from the previous close of 25,693.70, and the Sensex at 84,177.51, up 597.11 points or 0.71% from 83,580.40 [1] Banking Sector - Banking stocks led the gains, with State Bank of India rising 5.80% to ₹1,128.30, Shriram Finance up 1.59% to ₹1,018.40, and Kotak Mahindra Bank increasing 1.80% to ₹429.95, driven by expectations of improving credit growth [2] Pharmaceutical and Consumer Stocks - Pharmaceutical and consumer stocks saw buying interest, with Dr Reddy's Laboratories climbing 1.82% to ₹1,263.80 and Titan Company gaining 1.77% to ₹4,214.20, supported by a shift in foreign institutional investor sentiment, with net purchases of ₹1,950 crore on February 6 [3] Losers - On the downside, Max Healthcare fell 1.90% to ₹1,020.10, ONGC declined 1.10% to ₹266, Nestle India slipped 0.95% to ₹1,290.90, Bajaj Finance dropped 0.90% to ₹972.90, and Hindustan Unilever decreased 0.79% to ₹2,405 [4] Trade Agreement Impact - The India-US trade agreement has reduced tariffs on Indian goods from 50% to 18%, with India committing to purchase $500 billion in US goods over five years, enhancing export visibility and foreign investor interest [5] Sector Performance - Capital markets and realty indices outperformed with gains of 7.45% and 7.70% respectively, while the information technology sector faced a decline of over 7% due to the "Anthropic shock" [6] Economic Outlook - The Reserve Bank of India's decision to maintain the repo rate at 5.25% and projected GDP growth at 7.4% for FY26 reinforces macroeconomic stability, with benign inflation expectations at 2.1% for FY26 [6] Investment Sentiment - Clarity on the US-India trade deal is expected to benefit Indian exporters, alleviating previous uncertainties that weighed on the market [7]