On February 5, 2026, the Indian stock market experienced a decline, snapping a three-day rally, with both the Sensex and Nifty trading lower.
Key Indicators and Early Trading
In early trade, the 30-share BSE Sensex fell by 278.72 points to reach 83,538.97. Similarly, the NSE Nifty also declined by 94.15 points, settling at 25,681.85. This downturn follows a period of gains, with the Nifty and Sensex having surged by 3.8% over the previous three sessions, partly fueled by a US trade agreement that reduced tariffs on Indian products.
Factors Influencing the Market Decline
Several factors contributed to the negative sentiment in the market:
- Global Market Weakness: A weak trend in global stock markets has negatively impacted Indian indices. South Korea's Kospi traded lower by over 3%, and Japan's Nikkei 225, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index also showed negative movement. The US markets also closed mostly lower on February 4, 2026, with the Nasdaq Composite index tumbling 1.51% and the S&P 500 declining by 0.51%.
- Profit Booking: After a three-day rally, investors engaged in profit booking at elevated levels, contributing to the market's downward trend.
- Sectoral Performance: The decline was primarily driven by losses in metal shares, reversing gains made in the previous three sessions. Selling pressure was evident across cyclical and rate-sensitive sectors, including metals, realty, auto, and consumer-facing segments. Pharma shares also declined after advancing in the previous two trading sessions.
- Foreign Fund Outflow: Concerns regarding high share prices and potential foreign fund outflows have also contributed to the market's fall.
- Tech Stock Selloff: A global selloff in technology stocks has extended into Asia, driven by anxieties over high valuations and substantial investments in artificial intelligence. This has led investors to reduce their exposure to the tech sector.
Global Context and Tech Sector Concerns
The technology sector, in particular, has faced significant pressure. The tech-heavy Nasdaq and benchmark S&P 500 in the US ended lower on February 4, 2026. Concerns about AI disruption have negatively affected software stocks. Several major tech stocks, including Tesla and Nvidia, experienced notable declines. In Asia, MSCI's gauge of Asian tech shares also fell.
Impact on Key Stocks and Commodities
- Stock Performance: InterGlobe Aviation, Bharat Electronics, Axis Bank, Larsen & Toubro, Tata Steel, and Bharti Airtel were among the major losers in the Sensex. Conversely, Hindustan Unilever, Trent, NTPC, Infosys, Tata Consultancy Services, and State Bank of India were among the gainers.
- Precious Metals: Silver plummeted, dropping as much as 17%, and gold also declined significantly. Silver and gold ETFs also went down.
Expert Outlook and Market Sentiment
Analysts suggest that the current market volatility is influenced by macroeconomic factors and high leverage. The near-term price action is expected to be range-bound. Markets are showing broad-based weakness with selling pressure across cyclicals and rate-sensitive sectors, reflecting risk aversion.
Other Indicators
Brent crude, the global oil benchmark, dropped 2.07% to $68.02 per barrel. The US500, the main stock market index of the United States, fell to 6875 points on February 5, 2026, losing 0.11% from the previous session.