Sensex rises 170 points, Nifty flat as telecom, auto stocks offset losses in IT

Among sectors, Nifty Metal and Nifty Realty were the worst hit, each falling over 1 percent.

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Sensex and Nifty remained largely flat around noon on February 25, as gains in heavyweight telecom and auto stocks offset losses in IT and oil & gas, while global uncertainty over U.S. tariffs kept investors cautious. Renewed concerns over U.S. trade policies weighed on global markets, with President Donald Trump reaffirming that tariffs on Canada and Mexico were "on time and on schedule" and announcing fresh restrictions on Chinese investments in strategic sectors.

At 11:45 AM, the Sensex was up 174 points, or 0.2 percent, at 74,629, while the Nifty inched up 14 points to 22,567. The benchmarks have now declined nearly 14 percent from their record highs in late September and are on track for their fifth consecutive month of losses—the longest such streak since 1996. Market breadth was mixed, with 1,204 stocks advancing and 1,307 declining on the NSE.

"The market is oversold, large-cap valuations are fair and short positions in the market are high,"said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "But the real issue is the relentless FII selling in the cash market."

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"Since cash market selling and shorting in the derivatives market have been profitable for FIIs, they might continue to sell and try to profit from the negative momentum in the market. It is the sustained DII buying that is preventing the market from a capitulation."

He added that FIIs may continue selling and shorting in the derivatives market as long as it remains profitable, with domestic institutional investors stepping in to prevent a deeper market slide.

So far in February, FPIs have offloaded Indian equities worth Rs 43,263 crore, while domestic institutional investors (DIIs) have stepped in, purchasing shares worth Rs 47,787 crore.

"Trump tariff uncertainty will continue to weigh on markets. Domestically we need indications of a growth and earnings recovery in India," Vijayakumar said.

The broader market underperformed the benchmarks, with the BSE Midcap index down 0.4 percent and the BSE Smallcap index slipping 0.1 percent.

Among sectors, Nifty Metal and Nifty Realty were the worst hit, each falling over 1 percent.

The IT index declined 0.7 percent, extending losses from the previous session, as concerns over slowing U.S. growth weighed on sentiment. With a significant share of revenue coming from the U.S., Indian IT firms faced pressure after U.S. consumer sentiment plunged to a 15-month low in February. Inflation expectations surged amid uncertainty surrounding President Donald Trump’s proposed trade policies.

Also Read | SEBI proposes new way to measure risk in equity derivatives

The IT index also came under pressure following an overnight decline of over 1 percent in the tech-heavy Nasdaq Composite. Large technology stocks were the biggest drag, as investors grew cautious about demand for AI-driven technology while awaiting earnings from market heavyweight Nvidia.

Bajaj Finserv, Nestle, Bajaj Finance, Bharti Airtel, and M&M led the gainers on the Nifty, rising 1 to 3 percent. Meanwhile, Wipro, Coal India, SBI Life, Dr. Reddy’s, and Hindalco were among the biggest losers, falling 1 to 4 percent.

Tata Investment shares advanced 7 percent after Tata Capital board approved plans for an initial public offering. Shares of 360 ONE WAM gained nearly 4 percent after Citi issued an upbeat broking revenue projection, driven by its recent acquisition of Batlivala & Karani Securities for Rs 1,884 crore.

"From a technical analysis standpoint, the support level at 22500-22400 has become increasingly critical for the Nifty50 index in the immediate future. This level needs to be scrutinized by traders and investors, as its ability to hold may determine whether a rebound is possible or if further declines are on the horizon," said Sameet Chavan, Head of Research (Technical and Derivatives) at Angel One.

"On the flip side, the presence of a bearish gap at 22670-22720 casts a shadow over any potential recovery attempts. This gap is expected to present a significant barrier to upward price movement, acting as a stiff resistance point that could limit the index's ability to regain its momentum," he added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.