Indian equity indices extended their winning streak to a third consecutive session on Tuesday, February 10, 2026, closing modestly higher amid sustained foreign capital inflows and optimism surrounding a prospective trade agreement with the United States. The benchmark Nifty 50 index advanced 0.26% to settle at 25,935.15, while the Sensex climbed 0.25% to 84,273.92.
Sectoral Performance and Key Movers
Gains were primarily driven by the automobile and metals sectors, which rose 1.4% and 0.8%, respectively. Broader market indices also participated in the rally, with mid-cap and small-cap indices rising 0.5% and 0.35%. Notable individual performances included a 6.3% surge in shares of exchange operator BSE following its quarterly results, and a 2.82% gain for Tata Steel. Conversely, Ramco Cements declined 3% after its earnings report disappointed investors, while technology and financial names like HCL Tech and Bajaj Finance saw losses of up to 2%.
Foreign Inflows and Currency Strength
A key catalyst for the market's positive momentum was continued buying by foreign portfolio investors (FPIs). Provisional data indicated these overseas funds purchased Indian equities worth 22.55 billion rupees (approximately $249 million) on Monday. This influx of foreign capital provided a significant tailwind, reinforcing the market's upward trajectory. Concurrently, the Indian rupee strengthened, closing 18 paise higher at 90.58 against the US dollar, further bolstering investor sentiment.
Trade Framework Optimism
Market participants are closely monitoring developments related to an interim India-U.S. trade framework. The agreement, which outlines plans to lower tariffs and enhance economic cooperation, is viewed as a positive sentiment driver for export-oriented sectors. Analysts suggest the framework could benefit industries such as textiles, seafood, jewellery, and aerospace suppliers, providing a structural boost to bilateral trade relations.
Analyst Perspectives on Market Drivers
Market analysts attributed the rally to a confluence of factors. "Improving sentiment is being supported by renewed foreign inflows, strength in U.S. equity markets, and optimism around the interim trade framework," noted Aakash Shah, a technical research analyst at Choice Equity Broking. Vinod Nair of Geojit Investments added that firmer cues from Asian markets and the trade agreement were supportive, though he cautioned that intermittent profit-booking and mixed third-quarter corporate earnings could influence the near-term direction.
Technical Outlook and Key Levels
Following the three-day advance, technical analysis is regaining focus among traders. Shrikant Chouhan of Kotak Securities identified immediate resistance for the Nifty at the 26,000 level (Sensex: 84,500). On the downside, a slip below 25,900 (Sensex: 84,100) could trigger a short-term corrective dip toward the 25,800–25,750 zone. The market's ability to hold above these support levels will be critical for sustaining the breakout.
Inflation Data Looms as Critical Test
The rally's sustainability faces an imminent test with the release of key inflation data. India is scheduled to publish a revised Consumer Price Index (CPI) series on Thursday, while the United States will release its January CPI figures on Friday. These prints are highly anticipated, as they will influence expectations for future interest rate paths from the Reserve Bank of India and the U.S. Federal Reserve. Any significant upside surprise could prompt a repricing of rate bets, potentially creating volatility and testing the market's recent resilience.
While the current momentum is encouraging, analysts highlight that the advance remains contingent on the persistence of foreign inflows and the translation of trade optimism into concrete details. Should corporate earnings continue to disappoint or global interest rate expectations shift abruptly due to inflation data, the market may struggle to maintain its current altitude. The session's tone was partially set by Monday's trading, where State Bank of India soared 7.5% to a record high after reporting stronger-than-expected quarterly profits and raising its loan growth outlook.
