The Trade Deal High Meets the Tech Low: Navigating Nifty’s New Pivot

The Indian markets are currently caught in a fascinating tug-of-war that perfectly illustrates the "buy the rumor, sell the news" phenomenon. After yesterday’s historic 2.5% surge—fueled by the landmark India-US trade deal that slashed reciprocal tariffs to 18%—the Nifty and Sensex have opened under pressure today, February 4, 2026. This cooling-off is primarily a reaction to a brutal tech selloff on Wall Street, where the Nasdaq tumbled 1.4% overnight. Investors are now balancing the long-term euphoria of "Made in India" exports finally gaining a competitive edge in the US against the immediate reality of high valuations and a global software rout. While sectors like Textiles, Pharmaceuticals, and Adani-led Infrastructure are still basking in the glow of improved trade ties, the Indian IT pack is feeling the heat, with heavyweights like TCS and Infosys dragging the indices as they track their US peers.

It’s a healthy digestion of yesterday’s massive gains. The technical setup remains structurally bullish as the Nifty stays comfortably above its 200-day EMA, but the leadership is clearly shifting from growth-heavy IT to export-oriented manufacturing and banking. With the Rupee showing its best strength in years at 90.32 and the RBI policy meeting just around the corner on February 6, the smart money is moving away from the broader index play toward stock-specific alpha. Watch for a base formation around the 25,500–25,600 zone; any sustained hold here suggests that the trade-deal rally has legs. For now, the strategy is simple: treat the tech-induced dips as an entry point into the "Trade Deal Winners," but keep a close eye on the February 6 MPC outcome for the next big directional cue.

Disclaimer: The information provided in this post and the linked blog is for educational and informational purposes only. It should not be considered as financial or investment advice. Investing in the share market involves significant risk. Please consult with a SEBI-registered financial advisor before making any investment decisions. Past performance is not indicative of future results.