The Indian stock market faced a sharp downturn on Thursday, February 5, as investors engaged in heavy profit booking across sectors amid weak global cues. The Sensex fell over 500 points, hitting an intraday low of 83,151.62, while the Nifty 50 slipped below 25,650 during trade.
By the end of the session, the Sensex closed at 83,313.93, down 504 points or 0.60%, while the Nifty 50 ended at 25,642.80, shedding 133 points, or 0.52%.
The broader market also reflected the downturn:
- BSE 150 MidCap Index: down 0.43%
- BSE 250 SmallCap Index: down 0.81%
Overall, investors saw a loss of over ₹2 lakh crore in a single trading session, with the market capitalization of BSE-listed companies declining to ₹466.5 lakh crore from ₹469 lakh crore recorded in the previous session.
Market Performance Overview
The decline in the Sensex and Nifty came after a strong rally in recent sessions, fueled by optimism surrounding the India–US trade deal. However, the sudden reversal indicates that investors opted for profit booking after a prolonged upward trend.
Global market trends added further pressure. Major international indices experienced declines, with technology stocks under particular strain. This international selloff contributed to a cautious sentiment among domestic investors.
Factors Behind the Fall in the Indian Stock Market
Several key factors influenced the market slump on Thursday:
1. Weak Global Cues
Markets worldwide mirrored the downturn seen in India:
- South Korea's Kospi: down 4%
- Japan's Nikkei: down almost 1%
- Nasdaq: fell 1.5% overnight
Tech stocks, which dominated global investment themes, saw a rotation of capital as investors booked profits amid concerns over high AI-related costs. This global selloff influenced domestic markets, prompting cautious moves.
2. Mixed Q3 Earnings
Quarterly results have been mixed, slightly below expectations. This added pressure, particularly in mid and small-cap segments, where valuations remain elevated.
Investors appear to have responded with profit booking rather than new buying, keeping the market under pressure despite recent optimism.
3. RBI Policy Anticipation
The market is closely awaiting the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) announcement scheduled for Friday.
While no change in policy rates is widely expected, the market is watching the growth-inflation projections and liquidity measures, which could influence trading sentiment in the short term.
4. Rupee Weakness Against the Dollar
The Indian rupee closed at 90.3550 per dollar, marking a slight 0.1% decline from the previous session. At the same time, the Dollar Index rose by approximately 0.25%, raising concerns that a stronger dollar may limit optimism surrounding the India-US trade deal.
The shift in currency dynamics also affected foreign investor sentiment, reflecting in overall market weakness.
Summary
Thursday's market decline highlights the fragile balance between domestic optimism and global uncertainties. While recent rallies were driven by trade deals and positive sentiment, the market reacted sharply to profit booking, global tech selloffs, and currency fluctuations.
Key takeaways from the session:
- Sensex fell 504 points to 83,313.93; Nifty 50 down 133 points to 25,642.80
- BSE MidCap and SmallCap indices declined by 0.43% and 0.81%, respectively
- Investors lost over ₹2 lakh crore in market capitalization
- Global tech selloffs and weak cues played a major role in domestic declines
- The market is now looking ahead to RBI's policy decision for further direction
The session reflects a market in consolidation, balancing recent gains with caution ahead of global and domestic developments.
Source: Livemint
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