Sensex and Nifty: Recovery After Early Weakness

The Sensex opened the day 225.65 points lower but staged a robust comeback, rallying by 673.72 points during the session to close near its intraday high at 82,946.21, marking a 0.54% gain. The index remains approximately 3.87% below its 52-week high of 86,159.02, signalling some room for upside momentum. However, the Sensex continues to trade below its 50-day moving average (DMA), which itself is positioned above the 200-DMA, indicating a cautiously bullish medium-term trend.

The Nifty 50 mirrored this positive trend, buoyed by strong performances in select sectors and large-cap stocks, although it faced pressure from IT stocks and certain mid-cap names.

Sectoral Trends: Power Leads, IT Lags

Out of 38 sectors tracked on the BSE, 34 advanced while only 4 declined, underscoring broad-based market participation. The power sector emerged as the top gainer, rising 1.81%, supported by robust demand outlook and favourable policy developments. Conversely, the BSE IT sector was the sole notable laggard, slipping 0.53%, weighed down by profit booking and subdued global cues impacting technology stocks.

Other sectors such as banking and capital goods also contributed positively, reflecting improving economic activity and corporate earnings expectations.

Market Breadth and Capitalisation Trends

The advance-decline ratio across the BSE 500 stood at a healthy 1.24x, with 275 stocks advancing against 222 declining, indicating a positive market breadth. Large caps outperformed, with the BSE 100 index rising 0.54%, while mid caps and small caps lagged, falling 1.22% and 3.21% respectively. Small caps traded largely flat, reflecting investor caution amid mixed earnings and valuation concerns.

Top Gainers and Losers

Among the BSE 500 constituents, ABB led the gainers with an impressive 8.42% rise, followed by Brainbees Solutions at 6.03% and Siemens advancing 5.46%. These stocks benefited from strong order inflows and positive sectoral outlooks.

On the downside, Newgen Software declined sharply by 7.31%, Firstsource Solutions fell 6.92%, and Godfrey Phillips dropped 4.94%, pressured by disappointing earnings and profit-taking.

Large, Mid and Small Cap Movers

Within large caps, Canara Bank was the top gainer, rising 2.71%, supported by improving asset quality and credit growth prospects. Conversely, Persistent Systems was the largest large-cap loser, down 2.43%, reflecting sectoral weakness in IT.

Mid caps saw Brainbees Solutions gain 6.03%, while Hexaware Technologies declined 4.33%. Small caps were more volatile, with VL E-Governance surging 19.94%, contrasting with the 7.31% fall in Newgen Software.

Foreign Institutional and Domestic Institutional Activity

Foreign institutional investors (FIIs) exhibited cautious trading, with net inflows remaining subdued amid mixed global cues. Domestic institutional investors (DIIs) maintained a steady buying stance, supporting the market’s upward momentum. This dynamic helped large caps outperform while mid and small caps faced selling pressure.

Global Cues and Outlook

Global markets showed mixed trends, with US indices consolidating after recent gains and Asian markets trading cautiously ahead of key economic data releases. Concerns over inflation and central bank policies continue to influence investor sentiment worldwide. The Indian market’s resilience amid these factors reflects underlying strength in domestic fundamentals and improving corporate earnings visibility.

Technical and Valuation Insights

Technically, the Sensex’s recovery from early losses and its position relative to moving averages suggest a tentative bullish bias, though the index remains below the 50-DMA, signalling the need for confirmation through sustained gains. Valuation metrics remain reasonable for large caps, while mid and small caps appear stretched, justifying the cautious investor approach in these segments.

Upcoming Corporate Results

Market participants are closely watching the upcoming quarterly results, notably Schaeffler India scheduled to announce on 24 Feb 2026. Earnings from such companies will provide further clarity on sectoral trends and corporate profitability in the near term.

Investor Takeaway

Today’s market action highlights the resilience of large-cap stocks and the power sector amid a mixed backdrop for mid and small caps. Investors may consider focusing on fundamentally strong large caps and select mid caps with robust earnings prospects, while exercising caution in more volatile small-cap segments. The cautious stance of FIIs and the ongoing global uncertainties suggest that volatility may persist in the near term, warranting a balanced and selective investment approach.

With the Sensex still below key moving averages but showing signs of recovery, confirmation of sustained upward momentum will be crucial for broader market participation. Upcoming corporate results and global economic developments will remain key drivers for market direction in the coming weeks.

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