INDIA STOCKS-Indian shares poised to open near record-high levels after US trade deal

Feb 3 (Reuters) - India's equity benchmarks are set to open sharply higher near record highs on Tuesday, as the India–U.S. trade deal removes a major overhang for markets that have underperformed Asian and emerging market peers over the past year.

Gift Nifty futures GIFc1 were trading at 26,190 points, as of 8:26 a.m. IST, indicating the benchmark Nifty 50 index .NSEI will open about 4.5% above Monday's close of 25,088.4.

The Gift Nifty levels also indicate the Nifty ascending towards the record high of 26,373.20 hit in January.

U.S. President Donald Trump on Monday announced a trade deal with India that slashes U.S. tariffs on Indian goods to 18% from 50% in exchange of India halting Russian oil purchases and lowering trade barriers.

The key tail risk of India's geopolitical isolation about which investors were concerned has now been adequately addressed by the back-to-back deals with EU and U.S., Citi Research said in a note.

Analysts expect the overhang on Indian markets in terms of foreign outflows will be removed after the trade deal with the U.S.

Foreign portfolio investors (FPI) have offloaded shares worth $23 billion since the start of 2025, triggering a rare underperformance over Asian and emerging market peers.

The India-U.S. trade deal is a major boost for investor sentiment, acting as a positive trigger for foreign buying and supporting the rupee, said Jefferies analysts led by Mahesh Nandurkar.

The Nifty has gained about 6.1% since the start of 2025, underperforming most emerging market and Asian peers on U.S. trade concerns, muted earnings and record foreign outflows.

The trade deal is a big relief for textile, seafood, gems and jewellery companies, which have a higher exposure to the U.S. market.

Among major textile companies, Gokaldas Exports GOKL.NS, Trident TRIE.NS, KPR Mill KPRM.NS and Welspun Living WLSP.NS will be in focus, while seafood exporters including Apex Frozen Foods APEX.NS and Avanti Feeds AVNT.NS could also rise substantially.

Eternal ETEA.NS will be in focus after Jefferies added the stock into its India model portfolio in place of Godrej Consumer GOCP.NS, terming it a FPI favourite following the India-U.S. trade deal.