India Market Outlook – 4 February 2026

Overview

Indian equities closed marginally higher on 4 February 2026, ending a two‑day rally but retaining most of the strong gains generated after the announcement of the India–US trade deal earlier this week. The Nifty 50 added roughly 0.19 % to finish at 25,776, while the BSE Sensex rose 0.09 % to 83,817. Profit‑taking in large IT names offset gains in autos, consumer durables and metals. Mid‑cap and small‑cap indices outperformed large caps as value buying continued, and foreign institutional investors (FIIs) were net buyers for a second straight session.

Top indices

Index	Level/Change	Comments
Nifty 50	25,776.00 (+0.19 %)	Held above 25,750 after an intraday swing. Gains in autos, metals and consumer stocks offset heavy losses in IT.
BSE Sensex	83,817.69 (+0.09 %)	Index closed flat after choppy trade. Stocks such as Trent, Eternal, Power Grid, NTPC and Adani Ports cushioned the benchmark while IT majors dragged.
Nifty Bank	≈60,000 (≈+0.3 %)	Banking gauge ended higher; strength in PSU and private banks partly offset losses in Kotak Bank and Axis Bank.
Nifty MidCap 100	+0.63 %	Mid‑caps outperformed as stock‑specific buying continued after the budget and trade‑deal driven rally.
Nifty SmallCap 100	+1.27 %	Small‑caps rallied; broader market breadth remained positive.
India VIX	declined to around 11.5	Volatility index cooled as the market consolidated near recent highs.

Sector performance

Sector index	Performance	Notes
Nifty IT	−5.87 %	Sector was the day’s worst performer. Heavyweights Infosys, TCS, HCL Tech and Tech Mahindra plunged 4–7 % after a sharp sell‑off in US software stocks on fears that AI‑driven tools could hurt traditional outsourcing businesses.
Nifty Pharma / Healthcare	≈−0.3 %	Mild profit‑taking; Divi’s Labs held gains after strong Q3 results.
Nifty Auto	+1.18 %	Benefited from strong vehicle sales data and optimism over exports following Mahindra’s large export order. Maruti and M&M gained.
Nifty Metal	+1.27 %	Metals extended gains for a second session on hopes that the India–US trade deal would boost exports and after global metal prices firmed.
Nifty Realty	+1.12 %	Sector found support ahead of the RBI policy; improved demand outlook post‑budget continued to aid sentiment.
Nifty Consumer Durables	+2.66 %	Best‑performing index as discretionary stocks caught a bid. Titan and other consumer names rallied.
Nifty Oil & Gas	+2.08 %	Oil marketing companies and gas utilities advanced amid stable crude prices; BPCL saw momentum after a breakout on the technical charts.
Nifty Financial Services	+0.46 %	Financials stayed firm, aided by PSU banks and insurance stocks.

Key statistics

• Market breadth: On the NSE, approximately 1,630 stocks advanced, 921 declined and 90 remained unchanged, reflecting a bullish bias despite volatility.
• Trading range: Nifty had an intraday range of ~240 points; it oscillated between 25,563 and 25,802.
• FIIs/DII activity: Foreign institutional investors were net buyers of about ₹5,236 crore in cash equities on 3 February (data released a day later), while domestic institutions bought around ₹1,014 crore. This buying helped support markets following the prior day’s trade‑deal rally.
• Rupee: The Indian rupee strengthened modestly near ₹90.40 per US dollar, its best level in six years, as optimism around the trade deal and stable crude prices attracted foreign inflows.

Top gainers and losers

Nifty 50 top gainers

Stock	Price change (approx.)	Rationale/remarks
Trent	+5.1 %	Retailer continued its winning streak; investors bet on strong festive demand and margin expansion.
Eternal (Eicher Motors)	+5.0 %	Stock rallied on hopes of export growth; premium motorcycle sales remain robust.
Power Grid	+2.3 %	Gains followed reports of new interstate transmission projects.
NTPC	+2.3 %	Market cheered commissioning of 125 MW from its Bhadla solar project; renewable capacity build‑up supports longer‑term earnings.
Adani Ports	+2.2 %	Stock extended gains on expectations that reduced US tariffs and robust cargo volumes will boost profitability.

Nifty 50 top losers

Stock	Price change (approx.)	Rationale/remarks
Infosys	−7.3 %	Dragged by heavy selling in global IT stocks after an AI‑powered productivity tool from Anthropic raised concerns about margin pressures; cross‑currency headwinds also weighed.
Tata Consultancy Services	−7.0 %	Followed the broader IT sell‑off; traders booked profits ahead of earnings from US tech majors.
HCL Technologies	−4.5 %	Weak sentiment in the sector and fears about slowing outsourcing demand hurt shares.
Tech Mahindra	−4.3 %	Continued to decline after results; global IT rout added pressure.
Axis Bank	−1.3 %	Profit‑taking after a sharp rally.
Kotak Mahindra Bank	−0.8 %	Investors rotated into PSU banks and other private lenders.
Bajaj Finance	−0.1 %	Flat to lower ahead of its results announcement.
Hindustan Unilever	−0.0 %	Stayed almost flat; defensive FMCG stocks lagged as investors rotated into cyclicals.

Broader‑market movers

Stock	Change	Catalyst
Suven Life Sciences	+15.4 %	Announced strong Q3 results and positive commentary on its drug discovery pipeline.
Sheela Foam	+14.2 %	Posted better‑than‑expected quarterly earnings; demand for mattresses remains robust.
Avanti Feeds	+12.2 %	Market responded positively to margin recovery and optimistic export outlook.
Adani Power	+7.4 %	Benefited from improved tariffs and government emphasis on thermal capacity addition.
IDBI Bank	+6.7 %	Reports indicated that strategic stake sale may attract strong suitors; PSU banks stayed in favour.
Latent View Analytics	−7.5 %	Fell on concerns over growth after a mid‑cap IT sell‑off.
Triveni Turbine	−7.2 %	Declined despite strong order book; profit‑taking after a steep rally.
Coforge	−6.0 %	Hit by sector‑wide weakness in IT services names.

What moved the market

• IT sell‑off: US markets sold off sharply on 3 February as investors reassessed the impact of generative‑AI tools on software companies’ business models. The rout spilled over to India, triggering heavy profit‑booking in Infosys, TCS, HCL Tech and Tech Mahindra and dragging down the Nifty IT index by nearly 6 %.
• India–US trade deal euphoria moderates: The early‑week surge driven by the announcement of the India–US trade agreement slowed as investors digested details. Analysts note that while reduced US tariffs will be positive for exporters (textiles, gems and jewellery, autos), the rally could face hurdles given elevated valuations and uncertain global growth.
• FII inflows sustain momentum: Foreign investors bought equities worth ~₹5,236 crore in the previous session, reversing a long selling streak. The inflows, along with DII support of ~₹1,014 crore, offered a cushion during intraday dips.
• Global cues mixed: Weak US cues weighed on sentiment, while Asian markets traded mixed. Japan’s Nikkei 225 fell ~0.5 %, Hong Kong’s Hang Seng declined slightly and South Korea’s Kospi was up. Oil prices stayed near $67/bbl, limiting inflation concerns. Investors also monitored geopolitical tensions in the Middle East and forthcoming earnings from global tech giants.
• Domestic macro and policy outlook: Participants looked ahead to the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting scheduled for 6 February 2026. Analysts widely expect the MPC to maintain the policy rate and adopt a dovish tone, which could support rate‑sensitive sectors. Meanwhile, the rupee’s strength and easing bond yields improved sentiment in financial stocks.

Corporate updates and stock‑specific news

• Bajaj Finserv Q3 results: The financial conglomerate announced consolidated Q3 FY26 total income of ₹39,708 crore and profit after tax of ₹2,936 crore before exceptional items. Shares were largely flat ahead of the result; analysts expect moderate growth given rising credit costs.
• Devyani International results: Quick‑service‑restaurant operator reported a ₹10.9 crore net loss for Q3, though revenue stood at ₹1,440 crore; shares gained after the numbers beat street expectations.
• BHEL’s major order: Bharat Heavy Electricals (BHEL) received a ₹1,200–1,500 crore contract from Hindalco for supplying a 2×150 MW BTG package for the Aditya aluminium expansion. The order underscores BHEL’s improving order book.
• Mahindra’s export deal: Mahindra & Mahindra secured its largest‑ever export order, agreeing to deliver 35,000 units of the Scorpio Pik Up to an Indonesian state‑owned enterprise. The deal exceeds the company’s entire FY25 export volumes and boosted the stock.
• NTPC renewable expansion: NTPC Renewable Energy commenced commercial operation of a 125 MW block at its 500 MW Bhadla Solar project in Rajasthan, pushing up its renewable capacity. NTPC’s stock rallied as investors priced in higher renewable revenue.
• Sebi on F&O framework: The market regulator clarified that it will not introduce new restrictions on the derivatives segment despite the increased securities transaction tax announced in the budget, providing relief to traders.
• HAL under pressure: Hindustan Aeronautics declined over 8 % intraday after reports it was not selected in the technical evaluation for the Aeronautical Development Agency’s AMCA fighter jet programme. Bidders such as Tata Advanced Systems, L&T and Bharat Forge emerged as front‑runners.

Stocks to watch (5 February 2026)

Stock	Why it’s in focus
BPCL	Technical breakout above resistance around ₹370; momentum indicators remain positive. A sustained move could take the stock towards ₹395–400.
Torrent Pharma	Uptrend intact; respecting 50‑day exponential moving average. May head toward ₹4,280 if it holds above ₹3,915.
UPL	Rebounded from its 200‑day exponential moving average with a gap‑up move. A move past ₹780 could confirm further upside; stop loss near ₹720.
BHEL	Fresh order from Hindalco could improve earnings visibility. Watch for follow‑through buying; support around ₹185, resistance near ₹210.
Mahindra & Mahindra	Largest export order will drive sentiment; stock has momentum with support near ₹3,500.
HAL	Stock came under pressure after missing the AMCA bid. Investors will watch for any clarifications; oversold conditions may lead to a technical bounce.
Bajaj Finserv	Post‑results movement will be watched to gauge earnings outlook and loan growth.
Devyani International	Shares gained after quarterly results; sustained buying could extend rally.
NTPC & Power Grid	Renewable capacity addition and demand for transmission projects make both PSU utilities attractive in the medium term.

Technical outlook for 5 February 2026

• Nifty 50: The index has been consolidating after its sharp rally. Technical charts suggest that holding 25,500 is crucial for bulls. As long as the index stays above this support, it could attempt to test 25,900–26,000 in the near term. A breakout above 26,000 could open the door for a push towards 26,200. However, a fall below 25,500 may trigger profit‑booking toward 25,300. Options data show maximum call open interest at 26,000 and maximum put open interest at 25,500, indicating a trading range of 25,500–26,000.
• Nifty Bank: The banking index needs to hold above 59,750 to maintain its bullish bias. Resistance is seen near 60,500 and 60,750. A failure to hold 59,750 could drag the index towards 59,500. Traders should watch PSU banks, which have shown relative strength, while being cautious on Kotak Bank and Axis Bank.
• Market tone: Given the mixed global cues and the looming RBI policy meeting, the market is expected to remain range‑bound with a positive bias. Rotation into select sectors and stock‑specific action may continue. Traders should adopt a buy‑on‑dips strategy in structurally strong sectors such as autos, consumer durables, metals and oil & gas, while remaining cautious on IT and expensive high‑growth names. Volatility could rise ahead of the MPC outcome; appropriate risk management is essential.

Outlook for tomorrow

For 5 February 2026, investors should monitor:

1. RBI Monetary Policy expectations: Market participants expect the MPC to keep the repo rate unchanged at 6.5 % and maintain a neutral-to-dovish stance. Any surprise on policy rates or tone could influence banks, financial services and rate‑sensitive sectors.
2. Global market cues: Overnight moves in US equities and Asian markets will set the tone. Attention will be on earnings from Alphabet and Amazon and on any geopolitical developments.
3. FII flows and rupee movement: Continued foreign inflows and a strong rupee would support equities. A reversal in FII trends could add volatility.
4. Corporate earnings: Bajaj Finserv’s reaction after results, along with announcements from BPCL, Torrent Pharma and UPL, may influence sectoral momentum.
5. Technical levels: Nifty’s 25,500 support and 25,900–26,000 resistance are key. On breakouts or breakdowns, traders should adjust positions accordingly.

Overall, the Indian market appears poised for a consolidation phase with selective strength. Investors should remain stock‑specific and monitor global cues, institutional flows and domestic policy developments.