War Rhetoric vs. Trade Reality: Sensex Soars 2,000 Points Despite Geopolitical Warnings

Market snapshot: While Iran's Supreme Leader cautioned of a 'regional war' on Sunday, Indian markets decoupled from the fear on Tuesday. The Sensex surged 2,072 points (+2.54%) to 83,739, and Nifty climbed to 25,727, driven not by war drums but by a landmark US-India trade deal slashing tariffs to 18%.

Summary: Khamenei's war warning (Feb 1) was superseded by a US-India trade breakthrough (Feb 3). Markets ignored the geopolitical risk, rallying ~2.5% as oil stabilized near $66.

Key Takeaways

• Geopolitics Ignored: Markets prioritized the new US-India trade deal over Iran-US tensions.
• Sector Rotation: Capital is flowing into Textiles and Gems (tariff beneficiaries) while Oil stays muted ($66/bbl).
• Rupee Strength: INR appreciated to 90.19/USD, signaling foreign inflow confidence.

SAHI Perspective

The market's reaction confirms a 'Risk-On' pivot. The 2.5% rally suggests investors are pricing in a diplomatic resolution (talks resuming Friday in Istanbul) rather than conflict. The 'War Premium' in oil has evaporated, making this a prime moment to look at export-oriented sectors (Textiles, Jewelry) benefiting from the tariff cut to 18%, rather than defensive energy plays.

Closing Insight

Noise says 'War', Price says 'Growth'. Follow the trade deal flows, but keep a hedge on Friday's diplomatic outcome.

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