A simple visual representation of market movements as Indian equities open on a cautious note.
On Thursday, 5 February 2026, Indian equity markets began the trading session under pressure, reversing some of the optimism seen in the prior few sessions’ gains. Both benchmark indices — the BSE Sensex and the NSE Nifty50 — dipped into negative territory soon after the opening bell amid mixed global cues and sector-specific weakness. By mid-morning trade, the Sensex was down over 400 points, with the Nifty dipping below the 25,700 level as investors reassessed recent positions after a series of volatile sessions.
The broader market mood was tempered by tepid signals from global markets and internal sector headwinds, particularly in metal and IT stocks. Analysts pointed to a cautious tone ahead of key domestic policy updates and continued scrutiny over corporate earnings. While there were early hopes of support from recent trade deals and strong macroeconomic data, markets initially struggled to translate those into sustained upside.
Volatility Continues After Recent Rally
This early weakness came on the heels of a spirited rally in the Indian markets earlier in the week, where benchmark indices had posted notable gains. Sensex and Nifty had rebounded sharply in response to positive developments — including a headline-grabbing India-US trade deal that had injected bullish sentiment into Dalal Street. However, the upswing also carried heightened volatility, with profit-taking emerging as a dominant theme ahead of Thursday’s session.
Market veterans noted that such swings are characteristic of the post-Budget period, with traders adjusting portfolios as fresh data and global macro drivers come into sharper focus. While the broader trend remains nuanced, investors were balancing strong economic fundamentals against profit-booking and external market turbulence.
Sectoral Movers: Winners and Losers
On Wednesday, 4 February — the day before — the markets had ended moderately higher, underscoring the divergent fortunes of various stocks and sectors. Midcap and smallcap stocks outperformed large caps, suggesting that investors were seeking opportunities beyond the headline indices. Meanwhile, certain heavyweight industries such as information technology saw notable weakness.
Among specific stock performances that influenced overall market sentiment, IT stocks registered sharp declines, pressured by a sell-off that was partly influenced by global tech sector corrections. In contrast, stocks in consumer and industrial segments demonstrated relative resilience during the earlier session.
Stock-specific actions were also significant: Infosys emerged as one of the more pronounced drags on market performance, with its shares slipping sharply after profit-taking intensified. Other major IT names such as TCS, HCL Tech, Tech Mahindra and Wipro also recorded declines, reflecting broader sector weakness. On the upside, select industrial and energy names managed to stay firm, though with varying degrees of gains.
Broader Sentiment and Outlook
Investors’ focus remained split between domestic economic cues and global developments. On the macro front, data and policy expectations — including Reserve Bank of India (RBI) guidance and forthcoming earnings releases — were set to play a pivotal role in shaping market direction. While markets had shown resilience after steep post-Budget volatility, the current session’s early downturn reminded traders of the inherent unpredictability of financial markets. In this context, analysts cautioned that markets may oscillate in the short term, largely influenced by how corporate earnings, global risk appetite, and liquidity trends evolve in the coming weeks.
Ensuring a prudent approach, many institutional strategists reiterated the importance of stock-specific fundamentals as markets navigated broader macro uncertainties. With several key economic data points due in the near term and earnings commentary likely to influence sentiment, market participants were bracing for continued volatility even as benchmarks sought fresh direction.
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Last Updated on: Thursday, February 5, 2026 12:47 pm by Economic Edge Team | Published by: Economic Edge Team on Thursday, February 5, 2026 12:39 pm | News Categories: Business
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