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Informist, Thursday, Feb. 5, 2026

By Eshitva Prakash

MUMBAI – The benchmark indices are expected to move in a range Friday as investors focus on the policy decision of the Reserve Bank of India's Monetary Policy Committee and await clarity on the India-US trade deal, on which a joint statement is likely to be issued in five days, according to Commerce Minister Piyush Goyal. There were initial expectations that inflows from foreign investors would rise once the trade deal is finalised, but analysts see them focusing on fundamental concerns, especially earnings growth, once the initial exuberance from the deal fades.

Brokerages expect the central bank to keep the benchmark repo rate unchanged at 5.25% and continue to use liquidity management as the primary tool to manage volatility in yields. The trade deal and the ensuing rupee stability offer some solace as liquidity infusion thus far had been neutralised by the RBI's intervention in the foreign exchange market to prevent the rupee falling steeply, Nirmal Bang Institution Equities said.

While there was a large inflow of foreign funds a day after the trade deal was announced late Monday, investors are still concerned about the expensive valuations of Indian equities and the largely unimpressive earnings in sectors that invite a lot of foreign funds, Krishnan Sambamoorthy, head of research at Nirmal Bang, said. While the trade deal improved market sentiment, the short-covering-driven inflow of foreign investors is not a guarantee of further investments, he said. Wednesday, foreign institutional investors net purchased INR 297.90 million worth of equities, sharply lower than the INR 52.36 billion worth of equities they bought Tuesday.

While analysts have previously expected sectors such as textiles and seafood to gain from a downward revision in US tariffs, Krishnan's view is less enthusiastic. "We compete with Vietnam for sales in the textile sector, which has an almost comparable tariff to ours (18%)," he said. Additionally, given the rupee's weakness in comparison to Southeast Asian currencies, foreign exchange headwinds remain, deterring the engagement of foreign investors with the domestic equity market, he added.

Amid fluctuations in prices of metals, whose reverberations are being felt in stocks of companies producing these commodities, investors will focus on stocks of players with sizeable portfolios of copper, aluminium, and silver. Information technology companies will also be in focus after the recent decline in their shares as market participants across the world worry about the potential of artificial intelligence tools to hurt sales of outsourcing-dependent companies.

IT stocks will be in focus as brokerages are divided on the impact of AI tools on Indian IT companies. Jefferies believes the tools may be disruptive to application services revenue, which accounts for 40–70% of the top line for Indian IT companies, CNBC TV-18 reported. However, Macquarie said the concern is overdone and there are no significant revenue disruption risks. Analysts believe Indian IT companies cater to complex SAP needs of enterprises, which are unlikely to be hit by these AI developments.

Additionally, after Cognizant's strong result for the December quarter in the US, analysts see heightened demand in the banking, financial services, and insurance sector. Cognizant's application of AI-led productivity negates discussions about AI being negative for core software developers, Nirmal Bang said in a research report. The US IT company said new technology or plug-ins cannot immediately replace old technology debt and a bridge is needed, which is provided by Indian IT industry peers.

Thursday, the Nifty 50 settled at 25642.80 points, down 133.20 points or 0.5%. The 50-stock index is expected to find support at 25600 points and face resistance at 25800 points, Shrikant Chouhan, head of equity research at Kotak Securities said. The BSE Sensex closed at 83313.93 points, down 503.76 points or 0.6%.

Traders will focus on stocks of Max Healthcare Institute, Tata Motors Passenger Vehicles, and Bharti Airtel, which released their December quarter earnings after market hours Thursday. Tata Steel will also be in focus as the company is set to release its earnings Friday.  End

Edited by Rajeev Pai

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