Indian Markets Fall Slightly After U.S.-India Trade Deal Rally; IT Stocks Drag Nifty

Market Update at 12:29 PM: Indian stock markets were volatile on Wednesday, a day after staging a massive rally following the finalisation of the India-U.S. trade deal. The agreement has lowered tariffs on Indian goods from 50 per cent to 18 per cent, improving investor sentiment and lifting a key overhang for the markets.

However, weakness in information technology (IT) shares capped upside in the markets today. As of 12:03 PM, the Nifty 50 was trading 0.07 per cent or 17.75 points down at Rs 25,709.80, while the Sensex fell 0.18 per cent or 150.43 points to Rs 83,588.70.

Among Sensex stocks, Infisys, HCL Tech, TCS, Tech M, Bajaj Finance, Bajaj Finserv, and Eternal were the Top Losers, whereas M&M, Tata Steel, Power Grid, ITC, NTPC, RIL, ICICI Bank, Maruti Suzuki, and Bharti Airtel led the gains.

In the broader markets, the Nifty MidCap index inched up 0.04 per cent, and the Nifty SmallCap index rose 0.58 per cent. The Nifty IT index plunged 6 per cent, dragged down by Persistent Systems, LTIMindtree, Infosys, HCL Tech, Coforge, TCS, Mphasis, and Tech M.

Other sectoral movements included only the Nifty Realty index trading in the red, down 0.8 per cent. On the upside, the Nifty Auto and Nifty Metal indices gained over 1 per cent each, while the Nifty Private Bank index rose 0.5 per cent.

Market Update at 10:16 AM: Indian equity benchmarks opened largely steady on Wednesday, 04 Feb 2026, as optimism around the U.S.–India trade deal was counterbalanced by sharp losses in information technology stocks amid a global tech selloff.

At around 9:21 a.m. IST, the Nifty 50 was marginally lower by 0.03 per cent at 25,720.65, while the BSE Sensex slipped 0.12 per cent to 83,653.21. Market breadth remained positive, with 14 of the 16 major sectoral indices trading in the green, though overall gains were limited.

The Nifty IT index fell 3.75 per cent, weighing on the benchmarks. The decline followed a selloff in U.S. and European data analytics, professional services and software stocks after artificial intelligence firm Anthropic launched new workplace productivity tools, intensifying concerns over disruption in the sector.

In the broader market, Small-Cap stocks traded flat, while Mid-Cap stocks declined 0.3 per cent. The muted move came a day after a sharp rally, when both the Nifty 50 and Sensex surged around 2.5 per cent each, marking their strongest single-day gains in nine months.

Tuesday’s rally was driven by improved sentiment after the India–U.S. trade deal eased a major policy and tariff overhang, boosting investor confidence across sectors.

Pre-Market Update at 7:51 AM: Indian stock market benchmark indices Sensex and Nifty 50 are expected to open flat on Wednesday amid weak global cues. While global markets remain under pressure, domestic sentiment continues to stay positive following the announcement of the India–U.S. trade deal, with investors awaiting key details of the agreement.

Asian markets traded mixed on Wednesday after Wall Street ended lower overnight, dragged down by a sharp sell-off in technology stocks. On Tuesday, Indian equities witnessed stellar gains after the India–U.S. trade deal announcement boosted risk appetite across sectors.

The Sensex surged 2,072.67 points, or 2.54 per cent, to close at 83,739.13, while the Nifty 50 jumped 639.15 points, or 2.55 per cent, to settle at 25,727.55.

Asian equities mostly traded lower on Wednesday, tracking overnight losses on Wall Street. Japan’s Nikkei 225 declined 1.2 per cent and the Topix fell 0.39 per cent. South Korea’s Kospi rose 0.4 per cent, while the Kosdaq gained 1.01 per cent. Hong Kong’s Hang Seng index futures pointed to a lower opening.

Gift Nifty was trading around the 25,824 level, at a premium of nearly 7 points over the previous close of Nifty futures, indicating a flat opening for domestic indices.

U.S. stock markets ended sharply lower on Tuesday as technology stocks came under heavy selling pressure amid concerns that artificial intelligence could intensify competition for software companies. The Dow Jones Industrial Average slipped 0.34 per cent to 49,240.99, the S&P 500 fell 0.84 per cent to 6,917.81 and the Nasdaq declined 1.43 per cent to 23,255.19.

Major technology stocks declined sharply. Nvidia dropped 2.84 per cent, Microsoft fell 2.87 per cent, Meta Platforms declined 2.08 per cent, Alphabet slipped 1.22 per cent and Amazon lost 1.79 per cent. Salesforce, Datadog and Adobe fell about 7 per cent each, while Synopsys and Atlassian declined nearly 8 per cent. Intuit slumped 11 per cent.

Union Commerce and Industry Minister Piyush Goyal said the India–U.S. trade deal is in the final stages of detailing between negotiating teams. He added that India has secured better trade terms than competitors and that sensitive sectors such as agriculture and dairy have been fully safeguarded.

Geopolitical tensions escalated after the U.S. military shot down an Iranian Shahed-139 drone that approached the aircraft carrier Abraham Lincoln in the Arabian Sea. The drone was intercepted by a U.S. F-35 fighter jet, according to Reuters.

Nvidia is reportedly nearing a USD 20 billion investment in OpenAI as part of the artificial intelligence firm’s latest funding round, according to Bloomberg News. OpenAI is said to be seeking up to USD 100 billion in funding, potentially valuing the company at around USD 830 billion.

Japan’s services sector expanded at its fastest pace in nearly a year. The S&P Global final Japan Services PMI rose to 53.7 in January from 51.6 in December, marking the 10th straight month of expansion and the strongest growth in 32 months for the overall private sector.

Gold prices steadied after gaining more than 6 per cent in the previous session. Spot gold was little changed at USD 4,944.66 an ounce, while silver edged down 0.8 per cent to USD 84.48.

Crude oil prices rose for a second straight session amid escalating U.S.–Iran tensions. Brent crude gained 1.55 per cent to USD 67.33 a barrel, while U.S. WTI crude advanced 1.04 per cent to USD 63.87.

Bitcoin fell to its lowest level since Donald Trump returned to the White House more than a year ago. The cryptocurrency dropped as much as 7 per cent to USD 72,877 on Tuesday before recovering to around USD 75,800 early Wednesday. Bitcoin is down nearly 13 per cent so far this year.

For today, Sammaan Capital will remain on the F&O ban list.

Disclaimer: The article is for informational purposes only and not investment advice.