Sensex and Nifty flattened by midday on February 19 after opening lower, as investors remained cautious about stretched valuations and global trade uncertainties. The broader market, which had dragged the benchmarks in early trade, staged a strong recovery, helping the indices claw back losses.
At 11:47 AM, the Sensex was up 112 points or 0.2 percent at 76,079, and the Nifty was up 20 points or 0.09 percent at 22,965. About 2,613 shares advanced, 785 shares declined, and 99 shares were unchanged.
The muted sentiment came after U.S. President Donald Trump announced plans to impose 25 percent tariffs on auto, semiconductor, and pharmaceutical imports—a move that could disrupt international trade and ripple through global markets.
"Despite largecap valuations turning fair, and even attractive in segments like financials, the market continues to be weak," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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He also pointed to growing competition for foreign capital. "News of Chinese authorities encouraging their top businessmen to invest is another headwind for India since Chinese stocks are cheap and may attract big inflows from FIIs, which means FIIs might continue selling in India," Vijayakumar said.
So far in February, FIIs have net sold Indian equities worth Rs 28,335 crore.
"FIIs will start buying when the dollar depreciates and the US bond yields start coming down. This might take time. A strong fundamental factor that can turn FIIs into buyers is indication of earnings recovery in India. This is likely in early FY26. High frequency indicators might suggest a turnaround in growth and earrings soon," Vijayakumar added.
The broader market staged a strong comeback, with the BSE Midcap rising 1 percent and the BSE Smallcap surging 2 percent.
Sectorally, financial services and construction led the gains, while IT and telecom lagged.
Also Read | Smallcap, midcap indices gain up to 2% as broader markets outshine Nifty 50
The Nifty Pharma index slipped 0.8 percent, dragged down by Dr Reddy's and Aurobindo Pharma. Analysts warn of potential headwinds for India’s specialty chemical sector if Trump's reciprocal tariffs come into play. Citi Research noted that organic and miscellaneous chemicals currently face a 10 percent tariff in India compared to a 3 percent U.S. average, and other key exports to the U.S. and EU face 5-6 percent tariffs. Citi Research estimated that a 7 percent tariff on Indian exports to the US could impact EBITDA by 12 percent for PI Industries, 5 percent for Navin Fluorine, and 4 percent for SRF.
On the Nifty 50, BEL, L&T, Trent, Kotak Mahindra, and Tata Steel led the gainers, rising 1-2 percent, while Dr Reddy’s, TCS, Adani Enterprises, HUL, and Infosys were the biggest laggards, falling 1-3 percent.
Adani Enterprises slumped over 3 percent after reports that the U.S. SEC had sought assistance from India’s Justice Department in its investigation into Gautam Adani and his nephew.
IT services firm Hexaware Technologies had a strong market debut listing at a premium to the upper end of its IPO price range on both the BSE and NSE. The stock opened at Rs 731 on the BSE, compared to the issue price range of Rs 674-Rs 708, while on the NSE, it began trading at Rs 745.5, marking a 5.3 percent premium.
Axis Securities identified 22,913 as the key trend-deciding level for Nifty. If the index sustains above this mark, it could gain momentum and advance toward 23,025 – 23,104 – 23,216. However, if Nifty slips below 22,913, selling pressure may increase, leading to a potential decline toward 22,834 – 22,722 – 22,643.
All eyes are now on the FOMC meeting minutes, set for release later tonight, which could shape market expectations on the U.S. interest rate outlook—a key factor influencing global investor sentiment.
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