Market Snapshot

The Indian stock market bounced back with conviction on Monday, erasing a significant portion of the losses incurred during the special Budget-day session. The BSE Sensex surged 943.50 points, or 1.17%, to finish at 81,666.46. Similarly, the NSE Nifty 50 reclaimed the psychological 25,000 mark, closing at 25,088.40, up 261 points or 1.06%. The recovery was broad-based, with the midcap and smallcap indices also ending in the green, while the India VIX cooled by approximately 8%, signaling a reduction in immediate market anxiety.

Institutional Flows: Cash Market

The provisional data for February 02, 2026, highlights a continued tug-of-war between foreign and domestic institutions. Foreign Institutional Investors (FIIs) remained in a risk-off mode, whereas Domestic Institutional Investors (DIIs) provided the necessary liquidity to absorb the selling pressure.

• FIIs: Net sellers of ₹1,832.46 crore in the cash segment.
• DIIs: Net buyers of ₹2,446.33 crore in the cash segment.

Derivatives Market Activity

The derivatives segment remained under the spotlight following the Finance Minister's announcement of a hike in Securities Transaction Tax (STT) on F&O trades. While this had initially rattled traders on Sunday, Monday's session saw a recalibration of positions. Market participants noted that the STT hike is being viewed as a deterrent for speculative retail trading rather than a structural blow to institutional hedging. The Nifty's recovery was aided by short-covering in heavyweights, particularly in the banking and oil & gas sectors.

Key Drivers and Outlook

Several factors contributed to the positive momentum on Monday:

• Post-Budget Value Buying: After the 2% plunge on Sunday, blue-chip stocks like Adani Ports (up 5%), Power Grid (up 7.6%), and Reliance Industries (up 3%) became attractive to long-term investors.
• Cooling Crude Prices: Brent crude fell to approximately $66.45 per barrel amid easing geopolitical tensions between the US and Iran, providing a significant tailwind for the Indian economy.
• Earnings Momentum: Positive quarterly results from companies like Bajaj Housing Finance and Hyundai Motor India bolstered sentiment in the financial and auto sectors.
• Fiscal Prudence: Investors began to appreciate the Budget's focus on fiscal consolidation and the ₹12.2 lakh crore capital expenditure target for FY27, viewing it as a long-term growth blueprint.

Looking ahead, the market is expected to remain volatile as it fully absorbs the Budget's finer details and reacts to global cues. The focus will now shift toward the remaining corporate earnings and the Reserve Bank of India’s upcoming policy stance.

TAGS: FII, DII, Stock Market, Institutional Investors, Nifty, Sensex

Tags: FII DII Stock Market Institutional Investors Nifty Sensex

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