**Market Brief: Equities Hold Gains Amidst IT Sell-off & Trade Deal Optimism** **Date:** February 5, 2026 **Market Snapshot** Indian equities displayed resilience on Wednesday, consolidating recent gains despite a sharp divergence in sectoral performance. While the broader market sentiment remains buoyed by the newly announced India-US trade pact, heavy profit-booking in technology stocks capped the upside. * **Nifty 50:** Closed at **25,776.00** (+0.19%) * **Sensex:** Ended at **83,817.69** (+0.09%) * **India VIX:** Dropped to **12.30** (-4.6%), signaling a retreat in market volatility and stabilizing investor sentiment. **Key Drivers & Trends** **1. India-US Trade Deal Fueling Sentiment** The confirmation of the India-US trade agreement has acted as a primary tailwind. The reduction of US import tariffs to **18%** (down from 25%) and the removal of punitive duties linked to Russian oil purchases have injected fresh confidence into export-oriented sectors, particularly textiles, manufacturing, and pharmaceuticals. **2. IT Sector Under Pressure** In stark contrast to the broader rally, the Nifty IT index plunged approximately **6%**. Investors reacted negatively to news regarding advanced AI tools (specifically from Anthropic) potentially disrupting traditional software business models. Heavyweights like Infosys and TCS faced significant selling pressure, dragging down the benchmarks. **3. RBI Policy Expectation: Status Quo** All eyes are now on the Reserve Bank of India’s Monetary Policy Committee (MPC) decision scheduled for Friday. With the trade deal alleviating some immediate economic risks and growth remaining robust, the consensus expectation is for the central bank to maintain the repo rate at **5.25%**, pausing after the previous cycle of cuts to assess inflation trends. **4. Q3 Earnings & Budget Aftermath** The Q3 FY26 earnings season is presenting a mixed picture. Manufacturing and industrial stocks (e.g., Havells, CEAT) are outperforming due to improved margins and demand, while the IT sector struggles with growth concerns. Meanwhile, the market has largely absorbed the volatility from the recent Union Budget, shifting focus to the long-term capital expenditure push in infrastructure and semiconductors. **Sector Watch** * **Gainers:** Consumer Durables, Oil & Gas, MidCap, SmallCap. * **Laggards:** Information Technology (IT), Pharma (marginal dip). **Outlook** The market maintains a positive bias, supported by strong domestic flows and the strategic benefits of the trade deal. However, near-term movements will likely remain range-bound as traders await the final RBI commentary on liquidity and inflation.