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Posted February 09, 2026

Week Ahead: India-US Trade Deal, Q3 Earnings, and FII Activity – Key Market Triggers to Watch

Introduction – What’s Driving Market Sentiment This Week?

If you’ve been tracking the Indian stock market lately, you probably felt the mood swing. One day, investors are nervous. The next day, optimism takes over. Welcome to the world of stock markets, where emotions change faster than weather forecasts. ?????

This week, the Indian markets head into a crucial phase, influenced by a powerful mix of global cues, corporate earnings, foreign fund flows, and one major catalyst—the India-US trade deal. After bouncing back from Budget day lows, the NIFTY50 has extended its recovery for a second straight week, giving investors fresh hope.

But is this rally sustainable? Or is it just a temporary relief bounce?

Let’s break down all the key triggers you need to watch in the week ahead.

Recap of Last Week’s Market Performance

NIFTY50 and Sensex Weekly Movement

Last week was nothing short of a roller coaster ride. The markets witnessed sharp volatility following the Union Budget announcement, with benchmark indices dipping nearly 2% in a single session. However, sentiment flipped dramatically after news broke about the India-US trade deal.

As a result:

NIFTY50 climbed 1.4% to close at 25,693.
Sensex gained 1.5%, ending the week at 83,580.

This rebound signaled that bulls were back in action, at least for now.

Performance of Broader Markets

The broader markets also joined the recovery rally:

NIFTY Midcap 150: Up 2% to 21,926
NIFTY Smallcap 250: Gained 0.6% to 15,864

This shows that buying wasn’t limited to just large-cap stocks; broader participation returned, improving overall market sentiment.

Sectoral Performance Snapshot

Sector-wise, the markets painted a mostly green picture:

Real Estate: +7.7%
Energy: +7.0%
Oil & Gas: +6.4%

However, not everything was rosy. Two sectors struggled:

IT: -6.9%
Defence: -0.1%

The sharp fall in IT stocks caught investors off guard, and we’ll dive into that shortly.

India-US Trade Deal – A Game Changer for Market Sentiment

Key Highlights of the Trade Deal

The turning point of the week was undoubtedly the India-US trade deal announcement. The United States slashed tariffs on Indian goods from 50% to 18%, removing secondary tariffs of 25% linked to Russian oil imports.

In simple words, this move significantly reduced trade friction between the two countries.

Impact of Tariff Reduction on Indian Markets

Lower tariffs mean:

Better export opportunities for Indian companies
Improved profit margins
Enhanced global competitiveness

This acted as a massive confidence booster for investors, triggering aggressive buying across sectors.

How Investors Are Interpreting This Deal

Markets love certainty, and this trade deal brought clarity. It signaled improved diplomatic relations, smoother trade flows, and long-term economic cooperation—factors that typically support equity markets.

Think of it as removing a big speed breaker from a busy highway. Suddenly, traffic flows smoothly again.

RBI Monetary Policy – Status Quo and Market Implications

Why Interest Rates Were Kept Unchanged

The RBI’s Monetary Policy Committee (MPC) decided to keep interest rates unchanged at 2.52%, aligning with market expectations.

This move reflects:

Controlled inflation
Stable growth outlook
Balanced economic recovery strategy

Impact on Banking and Financial Stocks

Rate stability is usually positive for banks and NBFCs. It ensures predictable borrowing costs and steady credit growth. As a result, financial stocks witnessed mild buying interest.

NIFTY IT Index Crash – AI Disruption Fears Explained

Anthropic’s AI Launch and Its Market Impact

The IT sector faced heavy selling after AI company Anthropic launched advanced workplace automation tools capable of handling:

Contract reviews
Compliance checks
Coding
Data analytics

This triggered fear that AI could disrupt traditional IT services, threatening revenue streams of Indian IT giants.

Why IT Stocks Witnessed Sharp Selling

Heavyweights reacted sharply:

Infosys: -7.3%
TCS: -6.9%
LTIMindtree: -5.7%

Investors worry that AI-driven automation could reduce outsourcing demand, impacting long-term growth prospects.

Key Global Triggers – US Inflation and Jobs Data

Importance of CPI Data

The US Consumer Price Index (CPI) is one of the most critical global data points. It influences:

Interest rate expectations
Dollar strength
Global equity flows

Higher inflation may delay rate cuts, which could pressure global markets, including India.

Labor Market Indicators and Their Market Impact

US labor data reflects economic health. Strong job numbers could reinforce hawkish monetary policy, while weaker data might boost equity sentiment.

Q3 Earnings Season – Stocks to Watch

Major Indian Companies Reporting Earnings

Several big names are scheduled to announce Q3 results:

Titan
Mahindra & Mahindra
Coal India
ONGC
Hindalco
Apollo Hospitals
Britannia
Grasim Industries
Eicher Motors

These results will heavily influence sector-wise momentum.

US Corporate Earnings and Global Market Cues

Global markets will also track earnings from:

Coca-Cola
Cisco Systems
McDonald’s
Ford Motors

Strong results may lift sentiment across global equities.

Market Breadth – Signs of Recovery?

Technical Breadth Indicators Explained

Market breadth measures how many stocks participate in a move. The percentage of NIFTY50 stocks trading above their 50-day moving average rebounded from the low 30s to nearly 50%.

What Rising Breadth Means for Traders

This indicates easing selling pressure and a short-term recovery phase, though caution remains necessary.

FII and DII Activity – Are Flows Turning Positive?

FIIs Derivative and Cash Market Positioning

FIIs reduced their short futures positions:

Long positions rose to 18–19%
Short positions declined to 81–82%

In the cash market, FIIs turned net buyers in February, purchasing ?694 crore, ending a seven-month selling streak.

DII Support and Its Market Impact

DIIs remained consistent buyers, investing ?2,892 crore, providing strong support during volatility.

NIFTY50 Technical Outlook for the Week Ahead

Key Support and Resistance Levels

Support: 25,500
Resistance: 26,000 – 26,200

As long as NIFTY holds above 25,500, the short-term trend remains positive.

Trading Strategy Based on Technical Setup

Buy-on-dips remains the preferred strategy, but aggressive long positions should wait for confirmation above resistance levels.

Sectoral Strategy – Where Should Investors Focus?

Bullish: Real Estate, Energy, Oil & Gas, Capital Goods
Cautious: IT, FMCG (due to valuation concerns)
Neutral: Banking & Financials

Risk Factors to Watch in the Coming Week

US inflation spike
Sharp FII selling
Weak corporate earnings
Geopolitical developments

Markets are like a tightrope walk—balance is everything.

Short-Term vs Long-Term Market View

Short-term volatility will remain high. Long-term investors, however, should view dips as buying opportunities in quality stocks, especially in growth sectors.

Conclusion – What Should Investors Do Now?

The Indian market is standing at a crucial crossroads. While the India-US trade deal has injected optimism, global cues and earnings outcomes will decide the next move.

For traders, disciplined risk management is essential. For investors, patience and a long-term approach remain the winning strategy.

After all, successful investing is not about timing the market—but spending time in the market.

Disclaimer

The information provided in this article is for educational and informational purposes only. It does not constitute financial, investment, legal, or tax advice. Please consult with a certified financial advisor or a SEBI-registered professional before making any investment decisions. The author and publisher are not responsible for any financial losses or legal consequences incurred as a result of using this information.