Stock Market Outlook Today, February 5: Sensex, Nifty Likely to Consolidate; RBI Policy, Global Cues in Focus

Indian equity markets are expected to remain cautious but firm on Thursday, February 5, 2026, as investors navigate a mix of global uncertainty, sector-specific volatility and key upcoming policy events. After a highly volatile session on February 4, brokerages believe the near-term trend for the Sensex and Nifty will hinge on global cues, the Reserve Bank of India's (RBI) monetary policy decision and further clarity on the recently announced India-US trade deal.

Stock Market Outlook Today, 5 February 2026: Nifty, Sensex Prediction For Thursday Trading Session

On Wednesday, benchmark indices closed slightly in the green despite sharp intraday swings. The Sensex rose 78.56 points, or 0.09%, to settle at 83,817.69, while the Nifty gained 48.45 points, or 0.19%, to end at 25,776. Broader markets outperformed, with the Nifty Midcap index climbing around 0.6% and the Smallcap index rising over 1%.

However, overall upside was capped by a steep sell-off in IT stocks. The Nifty IT index plunged nearly 6% amid concerns that new AI-based automation tools, particularly following Anthropic's latest workplace productivity launch, could disrupt traditional outsourcing demand. The weakness in IT mirrored overnight losses in US technology stocks and had ripple effects across global markets.

Sectoral Trends: IT, Metals, Oil and Gas Shares in Focus

While IT stocks weighed heavily on sentiment, several other sectors provided support. Auto, energy, consumer durables, PSU, metals, oil and gas, power and realty stocks posted gains of 1-2%. Consumer durables and oil and gas emerged as top performers, rising 2.7% and 2% respectively, while metals and auto stocks also advanced over 1%.

According to Siddhartha Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services, markets are currently consolidating after the recent rally driven by optimism over the India-US trade agreement. "Indian equities consolidated on Wednesday as investors await further clarity on the Indo-US trade deal and look forward to the RBI's interest rate decision due on Friday," he said.

Khemka added that while AI-related concerns have triggered a sharp correction in IT stocks globally, the long-term impact on Indian IT companies is expected to be limited. He also noted that earnings so far for the December quarter have broadly been in line with expectations, and recent trade agreements with the US and the EU could support sector- and stock-specific opportunities going forward.

Nifty Prediction Today, February 5, 2026

Bajaj Broking Research expects the Nifty to remain in a consolidation phase with a positive bias, provided key support levels hold. "The index formed a small bullish candle with shadows on either side, signaling consolidation with stock-specific action," the brokerage said.

It identified immediate support for the Nifty around the 25,450 level, which coincides with the previous week's high and the 20-day exponential moving average (EMA). "Holding above this support will keep the bias positive and could open the upside towards 26,000 and 26,350 levels in the coming sessions," Bajaj Broking noted.

The brokerage cautioned that volatility is likely to stay elevated due to uncertain global cues and the RBI policy announcement. However, it advised investors to use any near-term correction as an opportunity. "Pullbacks from current levels should be viewed as buy-on-dips, with strong support placed around the 25,000-25,200 zone," it said, pointing to the confluence of the 200-day EMA and a key retracement level.

Bank Nifty Outlook

For Bank Nifty, Bajaj Broking highlighted a similar consolidation pattern. "Bank Nifty formed a high-wave candle with a small real body, indicating consolidation amid stock-specific action," the report said.

Immediate support is seen in the 59,500-59,200 range, which aligns with the 20-day and 50-day EMAs. As long as the index holds above this zone, the brokerage believes the bias will remain positive, with potential upside towards 60,800 and 61,700 in the near term. On the downside, strong short-term support is placed between 58,500 and 58,000.

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