Market Recap: Benchmark Indices Retreat Amid Global Headwinds and RBI Policy Cautiousness

Indian equity markets concluded the trading session on Thursday, Thursday, February 5, 2026, on a subdued note, snapping a three-day winning streak as benchmark indices retreated from recent highs. The BSE Sensex declined 503.76 points to close at 83,313.93, while the NSE Nifty 50 fell 133.20 points to settle at 25,642.80. This correction occurred despite burgeoning optimism regarding a pending India-US trade deal, as global headwinds and tactical profit-booking ahead of the Reserve Bank of India’s (RBI) monetary policy decision pressured domestic sentiment.

Executive Summary and Index Performance

The market mood turned cautious on Thursday, Thursday, February 5, 2026, with investors opting to secure gains following a 1,200-point rally in the Sensex over the previous three sessions. While the banking sector showed relative resilience, the broader market witnessed pronounced selling, particularly in the small-cap segment. The India VIX, the market's fear gauge, ended at 12.17, indicating that while volatility exists, there is no immediate panic among participants.

Benchmark Indices Performance

Market Mechanics: Intraday Volatility

The Nifty 50 opened the session at 25,755.90 and attempted a marginal recovery, touching an intraday high of 25,757.65. However, sustained selling pressure dragged the index to a low of 25,579.50 before a minor recovery led to the final close. Similarly, the BSE Sensex opened at 83,757.54, peaked at 83,784.17, and then slid to an intraday low of 83,151.62.

The Bank Nifty followed a similar trajectory but showcased better relative strength, holding above the psychological 60,000 mark. After opening at 60,315.35 and hitting a high of 60,328.30, it dipped to 59,881.05 before settling at 60,063.65.

Top Movers Analysis

NSE Top 5 Gainers

1. Trent Ltd (+2.98%): Topped the gainers' list at ₹4,132.00, driven by stellar Q3 results featuring 14.8% revenue growth and 27.6% EBITDA expansion. Investors remain bullish on the Zudio and Westside expansion narratives.
2. Max Healthcare Institute (+1.22%): Closed at ₹1,038.00, benefiting from defensive buying and capacity expansion optimism.
3. Tata Steel Ltd (+1.13%): Reached ₹197.60, bucking the broader metal sector weakness on hopes of infrastructure-led domestic demand.
4. JSW Steel Ltd (+1.04%): Settled at ₹1,241.00, following sectoral peer Tata Steel as budget-related infra optimism persisted.
5. Grasim Industries Ltd (+0.92%): Closed at ₹2,871.10, supported by its diversified business model and subsidiary UltraTech’s performance.

NSE Top 5 Losers

1. Hindalco Industries Ltd (-3.00%): The biggest laggard at ₹936.00, hammered by falling global aluminum and copper demand.
2. Eternal Ltd (-2.41%): Dropped to ₹287.05 as industrial manufacturing stocks faced margin compression fears.
3. Bharti Airtel Ltd (-1.66%): Settled at ₹1,992.20, primarily due to profit-taking despite stable long-term fundamentals.
4. Bharat Electronics Ltd (-1.53%): Fell to ₹432.50 following a downgrade by Morgan Stanley, which cited execution risks. This also weighed on HAL as Morgan Stanley downgraded it to 'Underweight'.
5. ITC Ltd (-1.19%): Closed at ₹310.10, witnessing profit-booking in its FMCG and hotel divisions after a strong recent run.

Sectoral Deep Dive

The sectoral landscape on Thursday, Thursday, February 5, 2026, was predominantly bearish. The Metal Sector was the worst performer, declining 1.02% as commodity prices softened globally. The IT Sector fell 0.56%, continuing a two-day slide triggered by the rise of AI automation tools from companies like Anthropic and Palantir, which pose a perceived threat to traditional outsourcing models.

• PSU Banking: The sole outlier, gaining 0.38% as markets anticipated favorable liquidity commentary from the RBI.
• Pharma: Remained nearly flat (-0.03%), acting as a defensive hedge.
• Auto & Realty: Both declined 0.58%, as the prospect of prolonged high interest rates dampened sentiment for rate-sensitive sectors.
• FMCG & Energy: Slipped by 0.38% each, with energy stocks pressured by falling crude prices.

Institutional Activity and Market Breadth

On Thursday, Thursday, February 5, 2026, Foreign Institutional Investors (FIIs) turned net sellers, offloading equities worth ₹2,150.51 crore. This reversal came after a brief buying streak, likely due to global risk-off sentiment and high domestic valuations (Nifty PE at 22.21x).

Conversely, Domestic Institutional Investors (DIIs) provided a crucial buffer, recording net purchases of ₹1,129.82 crore. Steady inflows through Systematic Investment Plans (SIPs) continue to support DIIs in absorbing FII sell-offs.

Market Breadth was distinctly negative:

• NSE: 18 advances vs. 32 declines among Nifty constituents.
• BSE: 1,737 advances vs. 2,447 declines, reflecting widespread selling across mid and small-cap segments.

Global Cues and Key News Impact

The 10% Silver Crash

A defining moment on Thursday, Thursday, February 5, 2026, was the historic crash in silver prices. MCX Silver futures plummeted 10% to ₹2.42 lakh per kg. This was triggered by massive profit-booking from previous highs of ₹4 lakh, steep margin hikes by exchanges, and a strengthening US Dollar.

Trade and Corporate News

• India-US Trade Deal: Expectation remains high for a signing within 4-5 days, though markets have now priced in much of the initial optimism.
• Indian Oil Corporation (IOC): Reported a massive 4x surge in Q3 profit to ₹12,126 crore, supported by robust refining margins.
• NSDL Technical Glitch: A mid-day glitch at NSDL delayed trade settlements, causing brief early-session anxiety before being resolved.
• Crude Oil: Slid to $67.66 per barrel, reflecting global demand concerns.

International Markets

Asian markets were mostly negative, with South Korea’s Kospi leading losses with a 3.7% drop. In the US, the Dow Jones gained 0.5% (49,501.30) on Feb 4, but the Nasdaq fell 1.5% (22,904.58) as AI disruption concerns hammered tech stocks.

Technical Outlook and Strategic Implications

Technical Support and Resistance

• Nifty 50: Immediate support lies at 25,600 (day's low), with a deeper floor at 25,400 (20-day MA). Resistance is pegged at 25,780 and the psychological 26,000 mark.
• Bank Nifty: 59,880 serves as crucial support. Resistance is seen at 60,500 and 61,000.

Strategic Advice for Investors

With the RBI Monetary Policy decision scheduled for February 6, 2026, volatility is expected to persist. Market participants anticipate a status quo on the repo rate at 6.5%.

• For Short-term Traders: Focus on stock-specific action in PSU banks and pharma for defensive positioning.
• For Long-term Investors: Use the current consolidation to accumulate quality large-caps in the IT and Auto sectors, which are currently facing transient headwinds.
• Caution: Monitor the 90.33 USD/INR level and global tech valuations, as they will likely dictate the next leg of FII flows.