The Indian stock market suffered strong losses in intraday trade on Thursday, February 5, as investors booked profits heavily across segments amid weak global cues. The Sensex crashed over 500 points to hit an intraday low of 83,151.62, while the Nifty 50 fell below 25,650.
The Sensex ended with a loss of 504 points, or 0.60%, at 83313.93, while the Nifty 50 closed at 25,642.80, down 133 points, or 0.52%.
The BSE 150 MidCap Index dropped by 0.43%, while the BSE 250 SmallCap Index declined by 0.81%.
Investors lost over ₹2 lakh crore in a single session as the overall market capitalisation of BSE-listed firms dropped to ₹466.5 lakh crore from ₹469 lakh crore in the previous session.
“Indian equities saw consolidation, as weakness was followed by a sharp rally in recent sessions driven by optimism around the US–India trade deal, suggesting profit booking was at play. Global cues added further pressure, with concerns over a broad-based tech sell-off in international markets and heightened US–Iran tensions leading to risk-off sentiment,” Vinod Nair, Head of Research, Geojit Investments Limited, noted.
Why did the Indian stock market fall today?
Let’s take a look at five key factors behind the fall in the Indian stock market today:
1. Weak global cues weigh on sentiment
The Indian stock market is mirroring he trend of major global peers. Korea’s Kospi crashed 4%, while Japan’s Nikkei dropped by almost 1%, following a 1.5% drop in the Nasdaq overnight.
Major markets worldwide are witnessing a selloff in tech stocks amid rising concerns about the high costs of AI investments.
AI dominated as an investment theme in 2025, and now investors are rotating their money by booking profits, as chatter about their valuations and risk-reward ratios gains momentum.
2. Unimpressive Q3 earnings
The Q3 results have been mixed and slightly below expectations, raising fears that the market is still not conducive to sustained buying.
With the Budget and India-US trade deal behind, investors’ focus is back on earnings trends and valuations, which are still stretched in the mid and small-cap segments.
“Over the long term, earnings dictate market direction. Events like the Budget, trade deals, or industry-level announcements can influence sentiment in the short run, leading to sharp reactions. But for the market to sustain gains, earnings backing is essential,” said Ajit Mishra, SVP of Research at Religare Broking.
Investors are ‘selling the rise’, anticipating the market to deliver subdued returns over the medium term as global uncertainties persist.
3. Caution ahead of RBI policy
Sanjay Malhotra, the Governor of the Reserve Bank of India (RBI), will announce the policy decision of the central bank’s Monetary Policy Committee (MPC) on Friday.
While the market is expecting a status quo on policy rates, the focus is expected to remain on the growth-inflation projection and liquidity measures for the financial system.
“Market participants are now turning their attention to the upcoming RBI policy meeting. With India’s growth outlook remaining strong, consensus expectations point toward a status quo on rates,” said Nair.
4. Rupee’s weakness against the dollar
According to news agency Reuters, the rupee closed at 90.3550 per dollar on Thursday, up 0.1% from the previous session.
Meanwhile, the dollar index rose about 0.25%, raising concerns that a stronger greenback could dampen optimism around the India-US trade deal.
That optimism had triggered a fresh round of FII buying in Indian equities, but a firmer dollar may once again push foreign investors away from domestic markets.
Meanwhile, according to Reuters, dollar-rupee forward premiums continued to fall this week. The one-year implied yield dropped to 2.39%, which is the lowest level in more than a month. It has fallen by about 20 basis points over the week.
5. Technical factor
According to Ponmudi R, CEO of Enrich Money, the short-term bias of the market remains sideways to mildly weak, with the Nifty 50 likely to oscillate between 25,580 and 25,750 unless a decisive breakout or breakdown emerges with volume.
Ponmudi highlighted that on the daily timeframe, Nifty remains below the 50-day EMA, indicating short-term weakness, while the 100-day EMA is acting as near-term support, keeping the broader medium-term structure constructive. Momentum indicators mirror this mixed tone, with RSI at 51 remaining in the neutral zone.
“Overall, the bias stays mildly bearish as Nifty struggles to sustain above the 25,700 mark,” said Ponmudi.
Sudeep Shah, Vice President- Technical and Derivatives Research at SBI Securities, believes that for Nifty, the 20-day EMA zone of 25,530-25,500 will act as immediate support for the index.
Shah said on the upside, the zone of 25,750-25,800 will act as a crucial hurdle for the index. Any sustainable move above 25,800 will lead to a further upside rally to the 25,950 level, followed by 26,100 in the short term, said Shah.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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