Sensex Falls 400 Points, Nifty Dips Below 23,600 Ahead of RBI MPC Verdict; Bharti Airtel, ITC Lead Decline

The Sensex and Nifty remained in negative territory on February 6, as investors adopted a cautious stance ahead of key corporate earnings and the Reserve Bank of India's (RBI) interest rate decision scheduled for February 7. Selling pressure from stocks like Bharti Airtel, ITC, and Trent kept the Nifty under pressure.

By 2:35 PM, the Sensex had dropped 399 points (0.5%) to 77,871, while the Nifty 50 was down 127 points (0.5%) at 23,568. Market breadth remained weak, with 1,592 stocks advancing, 1,873 declining, and 111 remaining unchanged.

Investor focus is now on RBI Governor Sanjay Malhotra’s first monetary policy review, which could influence market sentiment. With the government having introduced tax cuts in the Union Budget to stimulate consumption, the RBI's stance on interest rates will be a crucial factor in shaping future market direction.

"Markets have already factored in a 25 basis point rate cut. However, if the RBI delivers a dovish surprise, such as strong indications of future rate reductions, we may witness an upward movement," said Ajit Mishra, SVP Research at Religare Broking.

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Regarding market expiry, Mishra highlighted active call writing at the 23,700 level, keeping Nifty in a narrow range and likely closing around 23,600. "The market is struggling with key resistance levels in both medium- and long-term trends. Without a strong catalyst, breaking out remains challenging, and earnings so far haven't provided the necessary boost," he added.

The broader market lost momentum after a lackluster first half, with the BSE Midcap index sliding over 1% and the BSE Smallcap index declining 0.4%. Among sectoral indices, only Nifty Pharma managed to gain (up 0.7%), while others either hovered near flat or traded lower.

Leading decliners included Trent, Bharat Electronics, Titan, Bharti Airtel, and ONGC, which fell 2-5%, whereas Cipla, Adani Ports, HDFC Life, Dr. Reddy’s, and BPCL saw modest gains of 1-2%.

Among individual stocks, Voltas dropped over 3% after a legal setback in Qatar, where a court ordered the company to pay QAR 167.72 million (approximately Rs 402 crore) related to its joint venture with OHL International, Spain, and Contrack (Cyprus).

Bharat Earth Movers (BEML) also declined over 3% following disappointing December quarter results. The company's net profit nearly halved to Rs 24.4 crore from Rs 48.2 crore a year ago, with revenue falling 16.3% year-on-year to Rs 876 crore.

Swiggy shares slumped over 5% after reporting a wider third-quarter loss, while Sula Vineyards slid 4% due to a 35% drop in December-quarter profit, impacted by slowing urban consumption.

In contrast, VRL Logistics surged 14% after reporting strong profit growth.

Technical indicators suggest Nifty is at a crucial juncture. "There is strong support around 23,400, and if this level holds, an upward movement is likely," said Mehul Kothari, Assistant Vice-President of Technical Research at Anand Rathi Share and Stock Brokers. "A breakout above 23,850 would confirm a bullish trend, paving the way for higher levels. Until then, the market remains rangebound between 23,400 and 23,800."

Despite typical expiry-day volatility, Kothari expects market swings to be limited. "Recent months saw significant volatility, even moments of panic. However, post-budget optimism is contributing to stabilizing sentiment," he noted.