Indian equity markets closed lower in a volatile session on February 05, 2026, snapping a three-day gaining streak amid profit booking, weakness in IT and metal sectors, and cautious global cues from US tech declines. The bearish sentiment reflected broader caution following recent optimism on trade developments, with heavyweights dragging indices down despite some sector resilience and upcoming RBI policy focus on liquidity.
Indian Benchmark Indices End Lower After Three-Day Rally Amid Sectoral Selling
The BSE Sensex tumbled 503.76 points or 0.60% to settle at 83,313.93. The NSE Nifty 50 declined 133.20 points or 0.52% to close at 25,642.80. This marked a correction after recent gains driven by trade optimism. Selling pressure was evident across heavyweight stocks. IT and metal sectors led the declines. Auto and other cyclical names also contributed to the downside. Broader markets saw midcap and smallcap indices fall modestly. Investors booked profits amid volatility. Global cues turned weak overnight. US tech rout added to caution. Domestic factors included anticipation of RBI's February policy. The meeting is expected to maintain status quo on rates. Liquidity measures may take center stage. Earnings season mixed results influenced sentiment. Some sectors showed resilience despite the fall. Overall market breadth was negative. Trading volumes remained moderate. Foreign institutional investors continued net selling. Domestic institutions provided some buying support. The correction could test key support levels near 25,500 on Nifty. Analysts expect potential recovery if global stability returns. This session highlighted sensitivity to international developments. Long-term outlook remains constructive on reforms.
Source: Times of India - https://timesofindia.indiatimes.com/business/india-business/stock-market-today-nifty50-bse-sensex-february-05-2026-dalal-street-indian-equities-india-us-trade-deal-rbi-policy/articleshow/127922828.cms
IT and Metal Stocks Under Pressure as Global Cues Weigh on Dalal Street
IT counters faced significant selling on February 05, 2026. Metal stocks also came under heavy pressure. This contributed to the broader market decline. Weakness stemmed from global tech sector concerns. AI advancements raised fears of disruption. Profit booking followed recent rallies. Heavyweight stocks dragged indices lower. Broader participation in selling was observed. Midcap and smallcap segments corrected mildly. Global risk-off sentiment played a role. US markets saw sharp tech declines. This spilled over to Indian equities. Domestic factors included upcoming RBI policy. Expectations tilted toward liquidity focus. Rate pause appeared likely. Earnings from key companies showed mixed trends. Some IT firms reported challenges. Metals faced commodity price volatility. Investor caution increased intraday. Volatility index rose modestly. Trading activity concentrated in largecaps. Sector rotation favored defensives marginally. Overall sentiment turned cautious. Recovery attempts were seen but failed. Closing losses reflected sustained pressure. This could impact short-term momentum in tech. Long-term IT growth story intact despite near-term hurdles. Market awaits clearer global direction.
Source: YouTube / Business Channel - https://www.youtube.com/watch?v=5hddQw93hO8
India Monitoring Evolving Crypto Trading Patterns for Tax Compliance
India's tax authorities are engaging with cryptocurrency exchanges. This aims to understand changing transaction profiles. The Central Board of Direct Taxes chairman highlighted evolving technology. New patterns in crypto trading are emerging daily. Oversight over newer products is a priority. Punitive taxes on crypto gains remain in place. The RBI has cautioned against risks repeatedly. Stablecoins and other innovations face scrutiny. Compliance enforcement is being strengthened. This reflects growing regulatory attention. Crypto market volatility persists globally. Bitcoin and others saw declines. Domestic investors show interest despite warnings. Tax collection from virtual digital assets continues. Authorities seek better tracking mechanisms. This could lead to updated guidelines. Investor education remains key. Risks of fraud and volatility highlighted. Regulatory framework evolving steadily. This news underscores caution in digital assets. Potential implications for fintech sector growth. Long-term integration with traditional finance possible. Balanced approach needed for innovation and protection.
Source: Reuters - https://www.reuters.com/world/india/india-monitoring-evolving-crypto-trading-ensure-tax-compliance-top-tax-official-2026-02-05
RBI February MPC Expected to Prioritize Liquidity Over Rate Changes
The Reserve Bank of India's February 2026 monetary policy meeting approaches. Expectations center on a rate pause. Repo rate likely to stay unchanged. Focus shifts to liquidity management tools. This follows recent economic data trends. Inflation remains monitored closely. Growth impulses supported by policy continuity. Banking sector liquidity assessed regularly. Reverse repo and other instruments in play. Market participants anticipate calibrated approach. Global central bank actions influence outlook. US Fed stance impacts emerging markets. Domestic credit growth steady. Fiscal measures complement monetary policy. Bond yields reflect expectations. Rupee stability a consideration. Policy transmission remains effective. This could stabilize short-term rates. Banking stocks sensitive to announcements. Overall market sentiment cautious pre-policy. Post-meeting clarity expected. Continuity supports investor confidence. Liquidity infusions possible if needed. This underscores prudent central banking.
Source: LinkedIn / CNBC-TV18 - https://www.linkedin.com/pulse/top-stories-pm-modi-rajya-sabha-stocks-slide-rbi-mpc-tomorrow-hsmdc
US-India Trade Deal Implementation Faces Challenges on Russian Oil Imports
A recent US-India trade deal slashes tariffs on Indian goods. This offers export benefits. However, conditions include curbing Russian crude purchases. Enforcement remains a key issue. India seeks to balance energy security. Geopolitical considerations involved. Cheap Russian oil aided import costs earlier. Shift could raise input prices. Domestic refiners affected potentially. Global oil dynamics influence decisions. Compliance with deal terms critical. Joint statements expected soon. This could boost bilateral ties. Trade volumes may rise long-term. Challenges in diversification persist. Alternative suppliers being explored. Energy transition adds complexity. Market impact on related sectors possible. Investor attention on developments. Positive for manufacturing exports. Risks to current account noted. Strategic autonomy balanced with partnerships. This deal marks significant progress. Implementation phase tests commitment. Broader economic implications anticipated.
Source: Bloomberg - https://www.bloomberg.com/news/articles/2026-02-05/india-got-a-trade-deal-now-comes-the-hard-part
Nifty Faces Resistance Near 26,000 Amid IT Sector Weakness
Nifty attempted to push past 26,000 levels earlier. Heavyweight support aided recovery attempts. IT sector chaos limited upside. Global cues turned negative. Profit booking emerged intraday. Key support at 25,500-25,600 identified. Buy-on-dips strategy suggested by analysts. Breakout candidates monitored closely. Volatility persisted throughout session. Sector rotation observed marginally. Largecaps outperformed relatively. Broader indices corrected. Earnings momentum watched. Trade deal optimism lingers. RBI policy adds to anticipation. Technical levels crucial short-term. Momentum indicators mixed. Investor sentiment cautious. Potential for rebound on positive triggers. Resistance breakout needed for momentum. This reflects ongoing consolidation phase. Long-term uptrend intact. Strategic positioning advised.
Source: CNBC TV18 - https://www.cnbctv18.com/market/trade-setup-for-february-5-nifty-relies-on-heavyweights-to-push-past-26000-amidst-it-chaos-ws-l-19842214.htm
RBI Enforces Closure of Inactive and Non-Compliant Bank Accounts
New RBI rules effective from February 5, 2026. Inactive bank accounts face closure. Non-KYC compliant accounts targeted. Frozen accounts also included. This aims to enhance banking efficiency. Customers urged to activate accounts. UPI linkage recommended for activity. Dormant accounts pose risks. Regulatory compliance strengthened. Millions potentially affected. Steps to reactivate outlined. Identity verification essential. Digital banking promotes regular use. This curbs money laundering risks. Customer awareness campaigns needed. Banking sector cleanup ongoing. Impact on small savers possible. Proactive action advised. Long-term benefits for system integrity. Compliance culture reinforced.
Source: esteromustangs.com (summarizing RBI directive) - https://esteromustangs.com/rbi-bank-closure-2026
US Stocks Plunge Sharply as Tech Sector Rout Deepens
US markets ended sharply lower on February 5, 2026. Dow shed nearly 600 points. S&P 500 turned negative for the year. Nasdaq declined over 1.5%. Tech stocks led the sell-off. Risk-off sentiment gripped investors. Bitcoin plunged significantly. Labor data added weakness. Inflation concerns persisted. Fed rate cut expectations adjusted. Earnings disappointments weighed. Global spillover to emerging markets. Indian IT exposed to trends. Volatility increased across assets. Defensive rotation seen. Bond yields fell on growth fears. This impacts sentiment negatively. Caution advised in correlated sectors.
Source: CNBC - https://www.cnbc.com/2026/02/04/stock-market-today-live-updates.html
US Inflation Shows Signs of Reacceleration Pressuring Fed Policy
Core PCE inflation edged higher again. Readings approached 3% for core measures. Progress stalled in 2025 per Fed officials. Political pressures on central bank noted. Markets resist deeper rate cuts. Inflation risks remain elevated. Productivity gains insufficient offset. Alternative gauges confirm heat. Fed independence crucial. Higher long-term rates possible. Emerging markets face dollar strength. Indian imports and flows affected. Caution in monetary easing. This complicates global outlook. Vigilance on data needed.
Source: Reuters - https://www.reuters.com/markets/us-inflation-isnt-subsiding-its-heating-up-again-2026-02-05