Mumbai, Feb 4, 2026, 16:18 IST — Markets closed for the day.
- Nifty 50 eked out a slim 0.19% gain, while Sensex ended up just 0.09% after a late-day rally.
- The Nifty IT index plunged, marking its steepest drop in nearly six years amid fears of AI-driven disruption.
- Traders are zeroing in on Friday’s RBI policy announcement and awaiting more details on the U.S.-India trade deal.
Indian shares nudged higher Wednesday, holding on just barely after a steep drop in IT stocks offset gains from the new U.S. trade deal. The Nifty 50 crept up 0.19% to 25,776, while the Sensex inched forward 0.09% to 83,817.69.
IT remains a dominant force in India’s indexes and a key route for foreign investment. The recent tariff cut has provided a short-term boost to sentiment, but bigger issues around earnings and valuations linger. Foreign investors have only “dipped their toes” in so far; many big names want to see concrete profit growth before jumping in. https://www.reuters.com/world/india/indias-markets-get-tariff-relief-not-buy-yet-2026-02-04/
Tuesday’s jump set the pace. The Nifty surged 2.5% after a trade deal cut U.S. tariffs on Indian goods from 50% to just 18%. Foreign institutional investors rushed in, recording their biggest single-day inflow since late October, per provisional NSE data.
Wednesday saw a sharp turn in IT sentiment. The Nifty IT index dropped as much as 6.3%, its steepest fall since March 2020. This decline followed a global selloff triggered by U.S. AI firm Anthropic’s rollout of new workplace plug-ins for its Claude Cowork agent.
“Reliance on large vendor teams could decline, squeezing billable hours and margins,” said Systematix Group analyst Ambrish Shah. (Billable hours mean the time firms can charge clients for.) https://www.reuters.com/world/india/indian-tech-stocks-slump-anthropics-ai-tool-raises-global-staffing-concerns-2026-02-04/
Tata Consultancy Services, Infosys, HCLTech, and Tech Mahindra plunged sharply, shedding between 4.1% and 7.3%, anchoring the bottom of the Nifty 50. Meanwhile, most other sectors managed gains by the close.
Export-focused stocks held strong despite tariff concerns. Textile firms Gokaldas Exports and Indo Count Industries surged 20% and 13.2%, respectively. Seafood players Avanti Feeds and Apex Frozen climbed 11.7% and 6.8%, Reuters reported.
The rupee remains under pressure outside of equities. A Reuters poll shows strategists expect it to trade around 90.19 per dollar by the end of April, even after Tuesday’s sharp 1.36% surge — its biggest one-day rise since December 2018.
Rate expectations are tightening as the week unfolds. The RBI is widely anticipated to hold rates steady on Friday. Economists will zero in on any steps to improve the “transmission” of earlier rate cuts—whether reduced policy rates are actually lowering borrowing costs. They’ll also be watching for clues on liquidity support via bond purchases. https://www.reuters.com/business/india-central-bank-stand-pat-trade-deal-reduces-urgency-rate-cuts-2026-02-04/
TeamLease Services shares gained 4.5% following a nearly 47% jump in quarterly profit. The company attributed the surge to rising demand for specialized staff at global capability centres, offshore hubs operated by multinationals.
Fractal Analytics set its IPO price band between 857 and 900 rupees per share, targeting a valuation around 144.5 billion rupees ($1.6 billion), according to Reuters. The pricing reflects investor sentiment amid recent market swings.
The risk is clear: concerns about AI-driven disruption might drag down IT valuations. On top of that, with the trade deal still uncertain, investors will likely demand solid earnings numbers rather than just hopeful headlines.
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