Indian equities ended the week higher, with benchmark indices closing at their best weekly levels in the past three months. On Friday, 6 February, the Nifty 50 settled at 25,693.70, up 0.2 percent, while the BSE Sensex closed at 83,580.40, a gain of 0.32 percent. On a weekly basis from 1 February to 6 February, both indices rose by about 1.5 percent.
Market participants cited developments related to a United States–India trade agreement and budget-related decisions as key factors influencing sentiment during the week. The market also recovered from earlier declines seen on the budget day and from the impact of global selling pressure in software stocks.
Nifty Trading Range at Multi-Month High
The Nifty recorded its widest trading range since June 2024. At that time, markets had experienced heightened volatility following the ruling NDA alliance securing a lower-than-expected majority. During the current week, the market moved higher after an initial decline, with reactions to the US trade agreement and budget measures shaping overall direction.
Key Drivers During the Week
According to market participants, the week began under pressure following a proposal in the budget to raise taxes on derivatives. The Reserve Bank of India’s decision to keep the repo rate unchanged also had a mixed impact on sentiment. However, the announcement of the United States–India trade agreement on Monday altered market direction.
Under the agreement, US tariffs on Indian goods were reduced from 50 percent to 18 percent. In return, India agreed to halt purchases of Russian oil and to reduce certain trade barriers. The announcement coincided with a shift in market momentum during the week.
Global Factors and Pressure on IT Stocks
During the week, the launch of a new artificial intelligence tool by Anthropic led to pressure on global software and data services stocks. The tool is designed to perform multiple functions, including legal tasks, sales, marketing, and data analysis, contributing to declines in IT stocks.
The combined market capitalisation of Indian IT companies declined by about $21 billion during the week. The IT index fell 6.4 percent, marking its weakest weekly performance in the past four months. Shares of major IT companies, including Infosys, TCS, Tech Mahindra, and HCL Tech, declined between 5.8 percent and 8.2 percent.
Sectoral Performance Led by Infrastructure and Midcaps
Out of 16 major sectors, 14 ended the week higher. The smallcap and midcap indices rose 0.4 percent and 1.8 percent, respectively. Shares of infrastructure companies gained 4.2 percent, supported by the central government’s decision to undertake record capital expenditure in the next financial year.
At the stock level, shares of Adani Enterprises and Adani Ports rose 10.2 percent and 9.2 percent, respectively, following quarterly results. Market participants indicated that gains in large-cap stocks contributed to broader market movement during the week.
Increase in Investor Wealth
Total investor wealth increased by Rs 7,23,950 crore during the week. The market capitalisation of companies listed on the BSE rose from Rs 4,59,88,009 crore on Friday, 30 January, to Rs 4,67,11,959 crore on Friday, 6 February, reflecting the weekly rise in equity markets.
