Indian equities closed sharply lower on Thursday, February 5, as investors booked profits across sectors amid weak global cues and caution ahead of key domestic events.
The Sensex fell 504 points, or 0.60 percent, to end at 83,313.93 after touching an intraday low of 83,151.62. The Nifty 50 slipped 133 points, or 0.52 percent, to close at 25,642.80, briefly falling below the 25,650 mark during the session.
Broader markets also remained under pressure. The BSE 150 MidCap Index declined 0.43 percent, while the BSE 250 SmallCap Index dropped 0.81 percent.
Overall investor wealth eroded by more than ₹2 lakh-crore in a single session, with the total market capitalisation of BSE-listed companies falling to about ₹466.5 lakh-crore from ₹469 lakh-crore in the previous session.
Market participants said the decline reflected consolidation after the sharp rally seen in recent sessions, which had been driven by optimism around a possible India–US trade agreement. Weak global signals and rising geopolitical tensions added to the risk-off mood.
Domestic markets largely mirrored losses across global equities.
• South Korea’s Kospi fell around 4 percent
• Japan’s Nikkei slipped nearly 1 percent
• US tech stocks came under pressure overnight, with the Nasdaq declining about 1.5 percent
Global markets are witnessing a sell-off in technology stocks as investors reassess lofty valuations and the rising costs associated with AI investments. After a strong AI-led rally through 2025, many investors are now booking profits and rotating capital into safer assets.
Another key drag was the unimpressive set of December-quarter earnings.
While results have not been uniformly weak, several companies reported numbers below market expectations. With the Union Budget and trade-deal optimism already factored in, investor focus has shifted back to earnings visibility and valuations.
Analysts point out that mid and small-cap stocks, in particular, continue to trade at elevated valuations, making them vulnerable to corrections when earnings momentum disappoints.
Investors also remained cautious ahead of the Reserve Bank of India’s monetary policy announcement due on Friday.
While a change in policy rates is not expected, markets are closely watching the RBI’s commentary on growth, inflation and liquidity conditions. Any hint of tighter liquidity or a shift in inflation outlook could influence near-term sentiment.
The rupee closed at around 90.36 against the dollar, marginally weaker on the day, even as the dollar index edged higher.
A firmer dollar has raised concerns that foreign institutional investor inflows could slow after the recent bout of buying triggered by trade-deal hopes. Falling dollar-rupee forward premiums have also signalled reduced expectations of near-term currency gains.
From a technical perspective, market analysts say the Nifty remains in a narrow range with a mildly negative bias.
The index is trading below its 50-day moving average, indicating short-term weakness, though support near the 100-day average is helping contain deeper losses. Momentum indicators remain neutral, suggesting a lack of strong directional conviction.
Immediate support for the Nifty is seen around the 25,500–25,530 zone, while resistance is placed near 25,750–25,800. A decisive move beyond either of these levels is likely to determine the market’s next short-term trend.
For now, analysts believe volatility could remain elevated as global uncertainties persist and investors wait for clearer cues from earnings and central bank policy.
