Mumbai, February 5, 2026, 16:14 IST — Market closed.
- Nifty 50 fell 0.52% to 25,642.80; Sensex slid 0.60% to 83,313.93
- IT and metal shares led losses after a sharp three-session rally
- Traders now turn to the RBI policy decision due Friday
Indian shares snapped a three-day winning streak on Thursday, with the Nifty 50 closing down 133.20 points and the Sensex shedding 503.76 points as selling hit IT and metal stocks.
The pullback came after a powerful rebound earlier in the week, triggered by an India–U.S. trade deal announced by U.S. President Donald Trump that cut U.S. tariffs on Indian goods to 18% from 50% in return for New Delhi halting Russian oil purchases and lowering trade barriers. Portfolio manager Peeyush Mittal at Matthews Asia said the tariff threat had “raised a balance-of-payments risk”, feeding a cycle of rupee weakness and foreign outflows. Reuters
IT stayed a sore spot. The Nifty IT index had plunged 5.9% on Wednesday — its biggest one-day drop in nearly six years — after a global tech selloff tied to fresh fears that new AI automation tools could squeeze billable hours at services firms, and Sunny Agrawal at SBICAPS called the move a “knee-jerk reaction”. Reuters
Fourteen of 16 major sectors ended lower on Thursday, with small-caps down 1.3% and mid-caps off 0.3%. Reliance Industries slipped 0.9% and heavyweight financials fell 0.4%; Hindalco, Vedanta and Hindustan Zinc dropped 3% to 5%, while Multi Commodity Exchange of India slid 5.2% as gold and silver prices fell. Pankaj Pandey, head of retail research at ICICI Securities, said “we are witnessing profit booking after the jump post-U.S. trade deal”, though he flagged improving foreign portfolio investor flows, and Bajaj Finserv Asset Management’s Sorbh Gupta warned client budgets shifting to AI could be a near-term headwind but said the “existential threat” risk looked limited. Reuters
On the Sensex, “Eternal” fell 2.46% while Bharti Airtel dropped 1.61%, with Bharat Electronics, ITC, ICICI Bank and Reliance also weighing, Business Today reported. Ponmudi R, CEO at Enrich Money, said flows were “selective and stock-specific” and pegged the Nifty’s demand zone around 25,580–25,600 and resistance near 25,700–25,750 as traders looked for direction. Business Today
Commodities didn’t help. Gold fell 0.9% and silver dropped 9.3% as the dollar pushed up to a near two-week high; Christopher Wong, a strategist at OCBC, described a “self-reinforcing feedback loop” as losses fed into one another in thin liquidity. Reuters
There were pockets of strength. Quick service restaurant stocks climbed on earnings, with Devyani International up as much as 10% and Westlife Foodworld rising about 13% intraday; Motilal Oswal analysts said they want to see if January trends hold, while brokers watched “same-store sales growth” — sales at existing outlets — for signs the worst is past. Business Standard
The rupee finished slightly firmer at 90.3550 per dollar, supported by foreign banks’ dollar sales, though importer hedging capped gains. Analysts at Goldman Sachs said they expect the RBI to stay put, keeping the policy repo rate — the rate at which the central bank lends to banks — unchanged at 5.25% through 2026 as downside risks to growth recede.
Still, the day had a defensive feel. If the global tech unwind deepens or metals keep sliding with the dollar firm, the market’s recent risk-on bounce could fade quickly, especially in smaller stocks that led the decline.
A second fault line sits in positioning: foreign flows have started to look less one-way, but any fresh bout of selling by offshore funds would likely hit the same high-beta pockets that ran hardest after the trade-deal headline.
The next big marker is the Reserve Bank of India on Friday. Governor Sanjay Malhotra is due to deliver the policy decision at 10 a.m. IST, followed by a press conference at noon, with traders watching not just rates but guidance on liquidity and the path ahead.
