Sensex and Nifty Performance

The BSE Sensex opened the day 225.65 points lower but quickly reversed course, gaining 647.80 points intraday before settling with a modest 0.51% gain. The index currently trades approximately 3.91% below its 52-week high of 86,159.02. Despite the positive close, the Sensex remains below its 50-day moving average (DMA), which itself is positioned above the 200-DMA, signalling a cautiously bullish medium-term trend.

The Nifty 50 mirrored this pattern, supported by strong performances in heavyweight sectors. Large caps outperformed, with the BSE 100 index rising 0.55%, while mid caps and small caps underperformed, falling 1.22% and 3.21% respectively. This divergence highlights a risk-averse market environment where investors favoured established blue-chip stocks over more volatile smaller companies.

Sectoral Trends: Power Powers Ahead, IT Faces Headwinds

Out of 38 sectors tracked on the BSE, 33 advanced while 5 declined, indicating broad-based participation in the rally. The power sector emerged as the top gainer, surging 2.21% on the back of strong quarterly results and positive policy developments. This sector’s outperformance provided a key boost to the overall market sentiment.

Conversely, the Nifty IT sector was the biggest laggard, slipping 0.72% amid profit booking and cautious outlooks from some large IT firms. The sector’s underperformance weighed on mid and small cap indices, which have a higher IT stock concentration.

Top Gainers and Losers Across Market Caps

Among large caps, Tube Investments led the charge with a 4.18% gain, supported by robust volume and positive earnings expectations. Hitachi Energy was the top mid cap gainer, advancing 4.40%, reflecting renewed investor interest in the energy transition theme. VL E-Governance was the standout small cap, soaring 19.94% on strong buying interest and favourable sectoral tailwinds.

On the downside, Persistent Systems was the largest large cap loser, declining 1.82% amid profit-taking. Inventurus Knowledge Solutions fell 4.59% in the mid cap space, while Transworld Shipping plunged 10.24%, marking the steepest fall among small caps. Other notable decliners in the BSE 500 included Newgen Software (-7.90%), Firstsource Solutions (-7.11%), and OneSource Specialty Products (-5.72%).

Market Breadth and Investor Activity

The advance-decline ratio across the BSE 500 stood at a healthy 1.22x, with 275 stocks advancing against 225 declining. This positive breadth confirms the underlying strength in the market despite pockets of weakness in mid and small caps.

Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) activity remained mixed, reflecting global uncertainties. While FIIs showed cautious buying in large caps, DIIs were more selective, focusing on defensive sectors such as power and consumer staples. This balanced participation helped sustain the recovery after the initial dip.

Global Cues and Outlook

Global markets exhibited mixed trends today, with US indices closing marginally higher on easing inflation concerns, while European markets were subdued amid geopolitical tensions. Asian markets were largely flat, reflecting investor caution ahead of key economic data releases later this week.

These global dynamics influenced Indian markets, which opened lower but found support as domestic factors took precedence. The upcoming quarterly results season, including Schaeffler India’s report due on 24 Feb 2026, is expected to provide further direction. Investors remain watchful for earnings surprises and guidance revisions amid a backdrop of moderate economic growth and inflationary pressures.

Technical and Market Structure Analysis

Technically, the Sensex’s recovery from intraday lows and close above the psychological 82,900 mark is encouraging. However, the index’s position below the 50-DMA suggests that short-term resistance remains. The 50-DMA trading above the 200-DMA is a positive medium-term signal, indicating that the broader uptrend is intact.

Market breadth and sectoral participation support a cautiously optimistic outlook, but the underperformance of mid and small caps signals selective risk-taking. Investors may prefer to focus on quality large caps and sectors with strong fundamentals and visible earnings growth.

Investor Takeaway

Today’s market action reflects a cautious but constructive environment. Large caps and defensive sectors like power are attracting investor interest, while mid and small caps remain under pressure amid profit booking and global uncertainties. The advance-decline ratio and sectoral breadth suggest that the market is not in a broad-based sell-off, but selective stock picking is advisable.

With the Sensex still below key moving averages and global cues remaining volatile, investors should maintain a balanced approach, favouring companies with strong earnings visibility and resilient business models. The upcoming earnings season will be critical in shaping near-term market direction.

Upcoming Corporate Results

Market participants will closely watch Schaeffler India’s quarterly results scheduled for 24 Feb 2026. The company’s performance could provide insights into the industrial and automotive sectors, which have shown mixed trends recently.

Summary

In summary, the Indian equity market demonstrated resilience on 20 Feb 2026, with the Sensex recovering from early losses to close 0.51% higher. Large caps and the power sector led the gains, while mid and small caps lagged. Market breadth was positive, supported by selective buying from FIIs and DIIs. Global uncertainties and upcoming earnings remain key factors to monitor as investors navigate a cautiously optimistic market landscape.

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