Indian Stock Market Preview - February 6, 2026
Introduction
The Indian equity markets are bracing for a volatile and cautious opening this Friday, February 6, 2026. Early indicators from the GIFT Nifty suggest a significant gap-down of approximately 106 points, with futures trading near the 25,619.50 mark. This negative sentiment is primarily driven by a sharp "technology rout" in the United States and a corresponding sell-off across major Asian indices.
For domestic investors, the primary catalyst for the day remains the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announcement, scheduled for 10:00 AM IST. While global headwinds are strong, the Indian market demonstrated remarkable resilience in the previous session, closing at 25,642.80. Today's session will likely be a tug-of-war between weak global cues and the domestic policy stance, making it a critical day for retail participants to exercise discipline.
Global Market Cues and Overnight Developments
US Markets: Technology Sector Under Severe Pressure
Wall Street recorded its third straight session of losses on February 5, 2026. The downturn was led by the technology-heavy Nasdaq, which tumbled as investors questioned the high capital expenditure required for artificial intelligence (AI) relative to near-term profitability.
- Dow Jones Industrial Average: Declined 593 points (1.20%) to 48,908.72
- S&P 500: Fell 1.23% to 6,798.40
- Nasdaq Composite: Dropped 1.59% to 22,540.59
The most striking development occurred in after-hours trading, where Amazon shares plunged nearly 10% after the company projected capital spending of $200 billion. Other tech giants were not spared: Microsoft fell 4.95%, while Nvidia, AMD, Alphabet, Palantir, and Tesla all saw significant red on their screens.
Adding to the gloom, the JOLTS (Job Openings and Labor Turnover Survey) report showed US job openings falling to a five-year low of 6.542 million, signaling a cooling labor market that has raised fears of a broader economic slowdown.
Asian Markets: Contagion from Wall Street
Asian markets followed the US lead on Friday morning, with technology-heavy indices bearing the brunt of the selling pressure:
- Nikkei 225 (Japan): Down 1.22%
- Kospi (South Korea): Plunged 3.86% (after a terrifying initial drop of 5%)
- Kosdaq (South Korea): Fell 5.26%
- Shanghai Composite: Down 0.6% to 4,075.92
South Korea's sharp decline is particularly concerning for the global semiconductor supply chain, as its heavy weighting in tech stocks makes it a bellwether for AI sentiment.
Commodities and Currency Trends
- Crude Oil: Brent crude fell over 2% to trade between $67.05–$67.55 per barrel. This decline is attributed to easing supply fears surrounding US-Iran nuclear talks and global demand uncertainty.
- Dollar Index: The US Dollar Index firmed to 97.96, acting as a safe haven during equity volatility.
- USD/INR: The Indian Rupee showed resilience on February 5, trading at 90.22. While down 0.22% in the previous session, it remains stronger than the 91.00 levels seen earlier in the week.
- Precious Metals: Gold declined 0.7% to $4,735.99 per ounce, while silver also faced significant selling pressure globally.
A Note on Trade: The Trump administration has announced a landmark US-India trade deal, cutting reciprocal tariffs to 18%. This is expected to boost bilateral trade by $500 billion, providing a structural long-term positive for Indian exporters despite current market turbulence.
Reserve Bank of India (RBI) Monetary Policy
The MPC's decision is the "make-or-break" event for the domestic market today. After a series of rate cuts in 2025 totaling 125 basis points, the central bank is widely expected to maintain the status quo.
Policy Expectations at a Glance
| Indicator | Expectation |
|---|---|
| Repo Rate | 5.25% (Unchanged) |
| Policy Stance | Monitoring for shift from Neutral to Accommodative |
| Inflation Target | Trending toward 4% |
| Capex Context | ₹12.2 lakh crore allocation in Union Budget 2026 |
Deepak Agrawal of Kotak Mahindra AMC suggests that the recovering rupee might allow the RBI to provide mildly dovish forward guidance. Emkay Research anticipates system liquidity will ease to ₹2.4 trillion by the end of March. If the RBI moves toward an accommodative stance or announces durable liquidity injections, rate-sensitive sectors like Banking, Real Estate, and Auto could see a sharp recovery.
Technical Analysis: Nifty & Bank Nifty Outlook
Nifty 50 Levels
The Nifty closed at 25,642.80 on Thursday but has formed a "lower high" pattern for two sessions. Analysts note that while the index is respecting the 25,600 support, a break below 25,450 could lead to another leg down.
- Immediate Support: 25,600 / 25,550 (20-day EMA)
- Critical Support Zone: 25,500 – 25,450
- Major Support (200-day EMA): 25,250
- Resistance Levels: 25,728 / 25,755 / 25,850
- Major Hurdle: 26,000
India VIX: The volatility index dropped 0.69% to 12.17, which suggests that despite the global noise, Indian traders are not yet in panic mode.
Bank Nifty Levels
The banking index finished at 60,063.65. Its fate today is entirely tied to the RBI’s liquidity management commentary.
- Psychological Support: 60,000
- Pivot Supports: 59,920 / 59,815
- Deep Support: 59,600 (50-day moving average)
- Resistance Levels: 60,262 / 60,350 / 60,538
Options Market & Institutional Flows
Options Data Insights
- Put-Call Ratio (PCR): Slipped significantly to 0.81 from 1.07. This indicates a shift toward bearish positioning as call writing increased ahead of the RBI policy.
- Nifty Max OI: The 26,000 Call (1.45 crore contracts) acts as a ceiling, while the 25,000 Put (95.73 lakh contracts) serves as the floor.
- Bank Nifty Max OI: Both Call and Put OI are concentrated at the 60,000 strike, marking it as the ultimate pivot for the day.
FII and DII Activity (Last 5 Trading Days)
| Date | FII Net (₹ Crores) | DII Net (₹ Crores) |
|---|---|---|
| Feb 5, 2026 | -2,150.51 | +1,129.82 |
| Feb 4, 2026 | +29.79 | +249.54 |
| Feb 3, 2026 | +5,236.28 | +1,014.24 |
| Feb 2, 2026 | -1,832.46 | +2,446.33 |
| Feb 1, 2026 | -588.34 | -682.73 |
| 5-Day Total | +694.76 | +4,157.20 |
Analysis: Domestic Institutional Investors (DIIs) have been the backbone of the market, pumping in over ₹4,157 crores this week. However, the resumption of heavy FII selling on February 5 is a concern if global risk-off sentiment persists.
Stocks to Watch: February 6, 2026
Major Earnings Today
Investors should monitor the following companies reporting their Q3FY26 results:
- Tata Steel: Focus on export demand and input costs.
- Siemens: A gauge for infrastructure spending.
- Bosch, Shree Cement, MRF, Kalyan Jewellers, Sun TV, Whirlpool, BEML, IREDA, and JK Tyre.
Key Stocks in the Spotlight (Results & News)
- Hero MotoCorp: Buy on Dip. Reported a 12.1% rise in Q3 profit to ₹1,348.6 crores. The board approved a massive 5,500% interim dividend (₹110 per share).
- Bharti Airtel: Sell on Rise. Net profit dropped 55% YoY to ₹6,630.5 crores, though revenue grew by 15.2%.
- Tata Motors Passenger Vehicles: Sell on Rise. Reported a standalone loss of ₹233 crores. Consolidated losses hit ₹3,483 crores due to JLR cyberattack costs and stamp duties.
- Nykaa: Buy on Dip. Q3 consolidated profit surged 142.4% to ₹63.3 crores.
- Federal Bank: Buy on Dip. Received RBI nod for Blackstone to acquire up to 9.99% stake.
- LIC: Buy on Dip. Net profit up 17.2% to ₹12,958.2 crores.
- Mazagon Dock: Buy on Dip. Q3 profit rose 9% to ₹879.8 crores.
- UltraTech Cement: Commissioned 2.7 mtpa additional capacity in Aligarh.
- Infosys/HCLTech: Sell on Rise. The IT sector is currently a "no-go zone" due to the US tech rout and AI disruption fears.
Corporate Actions
Several stocks will trade Ex-Dividend today, which may lead to price adjustments:
- NTPC, Nestle India, NALCO, HUDCO, Manappuram Finance, and REC.
Sectoral Outlook
- IT Sector (Negative): High exposure to US spending makes this sector vulnerable to the Nasdaq's 1.59% drop. Analysts like Jefferies maintain a cautious outlook.
- Metals (Negative): Under pressure due to weak global demand; Vedanta and NALCO saw 7% drops in the previous session.
- Banking (Neutral/Positive): All eyes on the RBI. Private banks are outperforming PSU counterparts.
- Defense (Positive): Strong earnings from Mazagon Dock reinforce the Atmanirbhar Bharat narrative.
Trading Strategy for the Day
Intraday Levels to Watch
| Index | Buy Zone | Sell Zone | Stop Loss |
|---|---|---|---|
| Nifty 50 | 25,500 – 25,550 | 25,750 – 25,800 | Below 25,450 |
| Bank Nifty | 59,600 – 59,800 | 60,300 – 60,500 | Below 59,500 |
Post-RBI Scenarios
- Scenario A (Dovish): If the RBI signals liquidity injection, buy Bank Nifty and Rate-Sensitives. Targets: Nifty 26,000 / Bank Nifty 61,000.
- Scenario B (Neutral): Expect range-bound churn. Nifty range 25,500–25,800.
- Scenario C (Hawkish): If the RBI worries about inflation, book profits. Nifty could slide toward 25,250.
Risk Management Rule: Retail investors should deploy no more than 40% of capital today given the event risk. Mandatory 1.5% stop losses are recommended on all intraday positions.
Key Takeaways
- RBI Policy is the Key: Volatility will peak around 10:00 AM IST.
- Support Levels: Nifty must hold 25,500–25,450 to prevent a deep correction.
- Tech Headwinds: Avoid the IT sector until the US market stabilizes.
- DII Strength: Domestic buying of ₹4,157 crores over 5 days is the main safety net.
- Dividends & Results: Strong results from Hero MotoCorp and LIC offer selective buying opportunities on dips.
What This Means for Investors
Historical trends indicate that market openings influenced by global cues often see "price discovery" in the first 45 minutes, followed by a trend reversal if domestic news is positive. Investors should not panic at the gap-down. Instead, monitor the RBI's stance on liquidity. While the short-term outlook is clouded by the US tech rout, India's structural growth—underpinned by a ₹12.2 lakh crore capex budget and a new US-India trade deal—remains intact.