The Indian equity markets are navigating a period of high intensity following the Union Budget and a landmark trade agreement with the United States. As of February 5, 2026, the benchmark indices have stabilized after a historic single-day rally, with the **Nifty 50** holding firm above the **25,750** level and the **Sensex** positioned near **83,800**. Market sentiment is currently balanced between optimism over improved trade ties and caution ahead of the Reserve Bank of India’s (RBI) monetary policy decision. While the India-US trade deal sparked a surge of over **2.5%** in a single session earlier this week, the momentum has slightly cooled as investors seek concrete documentation of the agreement. Index Performance and Levels The **Nifty 50** recently closed at **25,776**, gaining **0.19%**, while the **Sensex** ended at **83,817**, up **0.09%**. Technical indicators show the Nifty maintaining its position above the **20-day Exponential Moving Average (EMA)** of **25,648**, which now serves as a primary support zone. Resistance is anticipated between **26,000** and **26,200**. The broader market continues to outperform the benchmarks. The **BSE MidCap** index rose by **1.9%** and the **SmallCap** index surged **2.6%** in recent trade. This indicates a "risk-on" appetite among retail and domestic investors, even as large-cap movements remain measured. Sectoral Trends Energy and Power sectors are leading the current gains, with companies like **NTPC** and **Power Grid** seeing significant buying interest. The consumption space is also active, led by **Trent**, which recently gained over **5%**. Conversely, the Information Technology (IT) sector is facing a sharp downturn. Major players including **Infosys** and **TCS** have seen corrections of **6% to 7%** following a tech rout in US markets. Concerns over high valuations and shifting spending patterns in global tech are weighing heavily on Indian software exporters. Macroeconomic Indicators The **Indian Rupee** has shown remarkable resilience, recently settling near **90.43** against the US Dollar. This follows a record single-day gain of **122 paise** earlier in the week, marking its best performance in years. Oil prices remain a supportive factor for the domestic economy. **Brent Crude** is trading near **$66 per barrel**, with projections suggesting a potential move toward **$55** by the end of the first quarter. Lower energy costs are expected to keep retail inflation within the RBI's target range. Institutional Activity and Policy Institutional flows show a divergence in strategy. While **Domestic Institutional Investors (DIIs)** have been net buyers, injecting over **₹2,400 crore** in recent sessions, **Foreign Institutional Investors (FIIs)** remain net sellers, offloading approximately **₹1,800 crore**. All eyes are now on the **RBI Monetary Policy Committee** meeting. Analysts widely expect the repo rate to remain unchanged at **5.25%**. The central bank is likely to maintain a "neutral" stance, focusing on the transmission of previous rate cuts while monitoring the impact of the new trade dynamics on economic growth.