Last Updated on February 6, 2026 11:31 pm by INDIAN AWAAZ

AMN / BIZ DESK

Indian equity benchmark indices ended marginally higher on Friday after a largely range-bound session, as investors reacted positively to the Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25 per cent.

At the closing bell, the BSE Sensex rose 266.47 points (0.32%) to 83,580.40, while the NSE Nifty gained 50.90 points (0.20%) to settle at 25,693.70.

On a weekly basis, including the Budget session held on Sunday, the Nifty advanced 1.47 per cent, marking its best weekly performance since the week ended November 14, 2025.

RBI Policy Takeaways: Growth Up, Inflation Slightly Higher

The RBI’s Monetary Policy Committee (MPC) maintained the rate pause but delivered an optimistic growth assessment.

• Q1 FY27 GDP forecast raised to 6.9%
• Q2 FY27 GDP estimate raised to 7%
• RBI avoided giving full-year GDP guidance due to the upcoming change in the GDP series.

On inflation, the MPC revised its FY26 forecast upward:

• FY26 inflation forecast revised from 2% to 2.1%

Market analysts believe the combination of stronger growth and slightly higher inflation could result in a prolonged pause in RBI policy action, keeping interest rates steady for an extended period.

The RBI also acknowledged that external headwinds have intensified since the December 2025 policy meeting, signalling caution amid global uncertainties.

Sector-Wise Market Performance (NSE)

Top Performing Sector

FMCG

• Nifty FMCG jumped 2.2%
• Strong buying interest was seen in consumer-heavyweights, with defensive demand supporting the segment.

Worst Performing Sector

Information Technology (IT)

• Nifty IT fell 1.47%
• IT remained under pressure amid concerns of AI-driven disruption and global demand uncertainty.

Mixed-to-Negative Sectors

Pharma

• Ended lower, reflecting profit booking after recent moves.

Auto

• Closed in the red due to weak broader sentiment.

Metal

• Slipped as global commodity trends remained cautious.

Realty

• Declined as traders stayed selective.

Media

• Ended lower amid limited buying support.

Market Breadth: Midcaps and Smallcaps Underperform

Despite benchmark gains, broader markets remained weak:

• Nifty Midcap 100 fell 0.02%
• Nifty Smallcap 100 declined 0.27%

This indicated that the rally was largely driven by select heavyweight stocks rather than broad-based buying.

Stock-Wise Action: Gainers and Losers

Top Gainers

• ITC
• Kotak Mahindra Bank
• HUL
• Bharti Airtel
• Bajaj Finance
• Bajaj Finserv

Top Losers

• TCS
• Tech Mahindra
• Adani Ports
• Eternal
• Asian Paints

Weekly Market Summary: A Rollercoaster Ride

Markets witnessed sharp swings throughout the week.

The week began with a steep decline on Budget day due to the STT shock, followed by an AI-triggered sell-off in IT stocks, which weighed heavily on sentiment.

However, the announcement of the long-awaited India–US trade deal turned into a major positive trigger, helping the indices recover strongly.

For the week:

• Sensex gained nearly 1.6%
• Nifty gained nearly 1.5%

IT Sector Damage: ₹2.4 Lakh Crore Market Cap Erosion

IT stocks remained the biggest casualty this week.

• IT stocks lost around ₹2.4 lakh crore in market capitalization.
• The BSE IT index dropped 6.2% during the week.

This reflected investor fears that artificial intelligence may disrupt traditional IT outsourcing models and reduce long-term revenue predictability for Indian IT majors.

Morgan Stanley Turns Bullish: Sensex Seen at 95,000

Global investment bank Morgan Stanley maintained a positive view on Indian equities.

It highlighted a rare combination of factors supporting India:

• Attractive relative valuations
• Weak foreign investor positioning
• Strong policy stimulus
• Growth revival cycle
• Undervalued rupee
• Potential corporate buyback revival

Morgan Stanley expects the Sensex to reach 95,000 by December 2026, implying a potential upside of around 14% from current levels.

Macro Comforts: Why India’s Story Looks Stronger

Morgan Stanley also cited improving macro fundamentals:

• Lower oil intensity in GDP
• Rising export contribution, especially services
• Fiscal consolidation reducing savings imbalance
• Lower inflation volatility due to policy reforms and flexible inflation targeting

The firm believes this combination could enable:

• structurally lower real interest rates,
• reduced volatility in growth and yields,
• and potentially higher market valuations (higher P/E multiples).

It also noted that such stability could support a long-term shift of household savings from traditional assets toward equities.

Foreign Investors Return: FPIs Turn Buyers

Foreign portfolio investors (FPIs) have returned to buying mode.

• After selling nearly ₹36,000 crore, FPIs purchased ₹8,129 crore worth of equities in February.

This reversal provided significant support to market sentiment during the week’s recovery phase.

Post-Budget Trend: Historical Data Supports Upside

According to ICICI Securities, historical analysis of the past three decades shows that post-Budget:

• Nifty delivers an average return of around 10% over the next three months

This strengthens the medium-term outlook, though near-term volatility may persist.

Market Outlook: Range-Bound with Stock-Specific Action

Analysts expect markets to remain largely range-bound in the near term.

Siddhartha Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services, said that market movement will likely be driven by:

• corporate earnings outcomes,
• global uncertainties,
• and upcoming US economic data.

He added that commentary from US Federal Reserve officials will be closely watched for cues on interest rate direction and global liquidity trends.

Overall, Indian markets ended the week on a positive note despite sharp volatility. While RBI’s policy stability and improved growth projections supported sentiment, IT weakness and global uncertainties kept investors cautious. Sector rotation remains strong, with FMCG and select financials outperforming, while technology continues to face pressure.