Sensex falls over 300 pts, Nifty below 25,700; metal, pharma stocks bleed

Market Overview - The Nifty and Sensex indices traded lower, ending a three-day rally as investors took profits at elevated levels, with the BSE Sensex dropping over 400 points to a low of 83,369 and the Nifty 50 declining over 100 points to slip below 25,650 [15] - The Nifty Smallcap 100 index fell by 1%, while the Midcap 100 index was down 0.5% [15] Sector Performance - Metal and pharma stocks were the worst performers, sliding 2% and 0.7% respectively [15] - IT stocks experienced steep declines due to a selloff in U.S. tech, driven by concerns over new automation tools from Anthropic that could disrupt outsourced IT services and pressure margins for Indian IT companies [2][15] Investment Insights - VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, indicated that the Nifty is in a consolidation phase with limited index movement but significant sector divergence [2] - The long-term impact of the recent selloff in IT stocks remains uncertain [2] - India's growth outlook is strong, supported by a growth-focused Budget and trade agreements with the EU and the U.S., which should bolster domestic consumption trends [5][15] Foreign Institutional Investment - Foreign institutional investors (FIIs) were net buyers of Rs 5,236 crore, marking the highest single-day inflow since October 28, following the India–US trade deal that alleviated market concerns [7][15] - Foreign investors extended their buying streak to two days, purchasing Rs 30 crore on February 4, while domestic institutional investors (DIIs) bought nearly Rs 250 crore [7][15] - A key trigger to monitor is the flow of foreign institutional investors; if selling slows and marginal buying increases, broader market strength could follow [6]