The Indian stock market remains highly sensitive to US dollar fluctuations, with IT and metal stocks showing sharp swings in early February 2026. A weaker rupee and foreign fund outflows have dragged indices lower, while global cues and commodity price shifts continue to dictate investor sentiment across these core sectors.
Key Highlights
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Market Performance: On January 30, 2026, the Sensex fell 296 points to 82,269.78, while the Nifty dropped 98 points to 25,320.65, snapping a three-day rally. The decline was led by metal and IT stocks, including Tata Steel (-4.57%), Infosys, HCL Tech, and Tech Mahindra.
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Dollar-Rupee Dynamics: Analysts note that dollar strength and rupee weakness remain critical triggers. While the US dollar is expected to soften in 2026, the rupee faces its own challenges, including trade imbalances and inflationary pressures.
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Metal Sector Volatility: Metal stocks have swung sharply post-Budget 2026, reflecting global commodity cues and US monetary policy signals. After strong January gains, profit booking and dollar-linked volatility triggered corrections, followed by selective rebounds on February 3.
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IT Sector Sensitivity: IT companies, heavily reliant on US and European clients, are particularly vulnerable to dollar movements. A stronger dollar boosts export revenues, while rupee depreciation adds margin support. Conversely, volatility in forex markets creates uncertainty for earnings visibility.
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Foreign Fund Flows: Fresh FII outflows have added to market pressure, with investors cautious ahead of the Union Budget and global monetary cues.
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Investor Sentiment: Market experts emphasize that currency trends, commodity prices, and global cues will remain decisive for IT and metal stocks in the coming weeks.
Why It Matters
Dollar movement is more than a forex story—it is a market-defining trigger for India’s IT and metal sectors. For IT, it directly impacts export revenues and margins. For metals, it influences commodity prices and global demand. Together, these sectors shape the trajectory of indices like Sensex and Nifty, making currency monitoring essential for investors.
Sources: PTI via Business Standard, Economic Times, Mint, Financial Express