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Informist, Tuesday, Feb. 3, 2026

 

By Simran Rede

 

MUMBAI – Foreign investors covered their short positions in index futures as sentiment in the Indian equity market improved after India sealed a trade deal with the US. Analysts expect market participants will continue to cover these positions for the next couple of sessions. However, gains in the Nifty 50 are likely to be limited as caution prevails and the market awaits further clarity on the details of the long-awaited deal with the US.

 

To be sure, India is yet to give clear details of the deal with the US. Though the overall trade deal is seen as positive in the long run, zero tariffs on US agricultural exports may dampen sentiment in the near term, analysts said. 

 

Traders covered short positions across the Nifty 50 options chain on Tuesday, indicating a reversal in bearish sentiment, after the index rebounded from Budget Day lows. The benchmark index saw the highest intraday rise in five years, but it fell just 32 points short of testing the record high of 26373.20 points it reached in early January. 

 

Tuesday, the Nifty 50 settled at 25727.55 points, up 639.15 points, or 2.6%. The BSE Sensex ended 2.5% higher at 83739.13 points, up 2072.67 points. Wednesday, any rise in the Nifty 50 is likely to face resistance at 26000 points while the fall is likely to be capped around 25500 points, according to technical analysts.

 

Traders also covered their short positions in February as well as March futures contracts of the Nifty 50 on Tuesday. The February futures contract of the Nifty 50 closed at a premium of 95.55 points to the spot index Tuesday, with open interest falling 2.7% to 16.93 million. The March futures contract rose 2.7% to end at 25823.10 points with its open interest falling 6.9% to 1.19 million.

 

The highest addition in open interest in the Nifty 50 options contracts expiring next week was seen at the 26000 strike on the call side and at 25800 strike on the put side. The maximum open interest was concentrated at 26000 call and 25000 put options contracts. 

 

Concerns over weak growth in corporate earnings of domestic companies and details on recent trade deals such as India-European Union and India-US are likely to weigh on investor sentiment in the near term, analysts said. The ongoing depreciation of the rupee and outflows from foreign institutional investors will also dent sentiment, they added. After Tuesday's surge, analysts keep a close eye on the positions of foreign institutional investors for the day.

 

--Nifty 50 February closed at 25823.10, up 681.30 points; 95.55-point premium to the spot index
--Nifty 50 March closed at 25973.60, up 676.20 points; 246.05-point premium to the spot index
--Nifty 50 April closed at 26115.00, up 681.60 points; 387.45-point premium to the spot index

 

ICICI Bank, Reliance Industries, HDFC Bank, Multi Commodity Exchange of India, Adani Enterprises, State Bank of India, Axis Bank, Adani Ports and Special Economic Zone, Varun Beverages, Bajaj Finance, BSE, Infosys, Vedanta, Eternal, Mahindra & Mahindra, Dixon Technologies (India), and Maruti Suzuki India were the most actively traded underlying stocks Tuesday.  End

 

Edited by Deepshikha Bhardwaj

 

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