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Market Snapshot

The Indian stock market witnessed a "V-shaped" recovery during Friday's session. After an early dip that saw the Sensex slide to a day's low of 82,925.35, a final-hour buying spree propelled the indices into the green. The BSE Sensex closed 266.47 points, or 0.32%, higher at 83,580.40. Similarly, the NSE Nifty 50 gained 50.90 points, or 0.20%, to settle at 25,693.70.

The recovery was largely fueled by the RBI’s Monetary Policy Committee (MPC) meeting, where the central bank unanimously decided to keep the repo rate unchanged at 5.25%. Furthermore, the RBI’s upward revision of the growth projection for H1 FY27 provided much-needed confidence to investors.

Institutional Flows: Cash Market

The institutional activity for February 06, 2026, showed a notable shift in sentiment, with foreign investors taking the lead while domestic institutions booked profits.

• Foreign Institutional Investors (FIIs): Recorded a net inflow of ₹1,950.80 crore.
• Domestic Institutional Investors (DIIs): Recorded a net outflow of ₹1,265.10 crore.

This marked a reversal from the previous session's trend, as FIIs returned to the buying side, absorbing the selling pressure from domestic funds.

Derivatives Market Activity

Derivatives data signaled a shift toward "Medium to Strong Bullish" sentiment among institutional players. The India VIX, a measure of market volatility, eased by 1.89% to settle at 11.94, suggesting that the immediate nervousness surrounding the RBI policy has subsided.

• FII Index Futures: Positions remained largely optimistic, with a net bullish bias following the policy clarity.
• FII Index Options: Activity surged in the final hour, with significant long positions added in Nifty and Bank Nifty calls.
• Sectoral Performance: The FMCG sector was the standout performer, surging 2.27%, led by heavyweights like ITC and HUL. Conversely, the IT sector faced headwinds, closing as the top loser with a 1.47% decline.

Key Drivers and Outlook

The primary driver for the day was the RBI’s "neutral" stance, which suggests flexibility in future rate actions depending on inflation data. The proposal to allow banks to lend to Real Estate Investment Trusts (REITs) also provided a boost to the Realty sector.

Looking ahead, the market will transition its focus to global cues and the remaining corporate earnings for the third quarter. While the US markets showed signs of weakness due to tighter monetary policy concerns, the domestic narrative remains supported by robust growth projections. Analysts expect the Nifty to consolidate around the 25,700 level in the coming week, with a positive bias if FII inflows continue.

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

Tags: ** FII DII Stock Market Institutional Investors Nifty Sensex