Sensex snapped its five-day losing streak to close slightly higher on February 25, driven by gains in financials and telecom stocks. However, oil & gas and IT stocks remained under pressure. Nifty IT struggled for direction and ended flat. The indices had opened on a cautious note as investors weighed renewed global uncertainty over U.S. tariffs.
The global market mood was dampened by fresh concerns over U.S. trade policies. President Donald Trump doubled down on tariffs against Canada and Mexico, reaffirming that they were “on time and on schedule,” while also announcing new restrictions on Chinese investments in strategic sectors.
At close, the Sensex had edged up 147 points, or 0.2 percent, to 74,602, while the Nifty fell 27 points, or 0.1 percent, to 22,526. Despite the rebound, both indices remain nearly 14 percent below their record highs from late September and are on course for their fifth consecutive month of losses—the longest such streak since 1996. On the NSE, 958 stocks advanced and 1,642 declined.
"The tariff issue remains a concern, though its impact on India is relatively limited," said Rohit Srivastava, Market Strategist & Founder at Indiacharts. "The bigger worry is whether these trade restrictions will escalate into a global growth slowdown. While it's too early to determine the full extent of the impact, any uncertainty tends to make markets jittery."
Srivastava also noted that Indian equities appear oversold based on multiple indicators, but a decisive price reversal is yet to emerge.
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The recent market slump has been driven by India’s premium valuations, fears of U.S. tariffs, concerns over stagflation, a meteoric rally in Chinese stocks, and persistent selling by foreign investors.
So far in February, FIIs have offloaded Indian equities worth Rs 43,263 crore, while domestic institutional investors (DIIs) have stepped in, purchasing shares worth Rs 47,787 crore, preventing a deeper selloff.
Broader markets underperformed, with the BSE Midcap index and the BSE Smallcap falling half a percent.
Regarding the broader market, Srivastava said, "At this stage, we will likely see a divergence between growth-oriented companies and those that have surged without fundamental support. Stocks with high valuations but weak growth will continue to underperform."
He said that historically when mid-caps begin underperforming large caps, this trend can last for a year or two.
"Investors should be prepared for a prolonged phase of underperformance in the broader market, except for select stocks that demonstrate strong earnings growth. Only companies that can sustain growth will be able to hold their valuations. Others may continue to drift lower. From an index perspective, large caps may appear to outperform mid-caps, but within the mid-cap segment, some growth stocks will still do better than large caps."
Among sectors, Nifty Metal, Nifty PSU Bank, Nifty Realty, and Nifty Oil & Gas were the biggest laggards, shedding over 1 percent each.
Metals, including aluminium and copper, declined as market sentiment took a hit following U.S. President Donald Trump’s move to restrict Chinese investments. The sell-off in raw materials mirrored losses in local equities, with aluminium falling for a third consecutive session on the London Metal Exchange.
Chinese stocks also slumped after the U.S. escalated its stance against Beijing, with Trump directing a key government committee to limit Chinese investments in technology, energy, and other strategic American sectors. Given China's position as the world’s largest consumer of industrial metals, the move added to concerns over global demand.
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The IT index declined almost 1 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.
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.
On the Nifty 50, Titan, Nestle, Bajaj Finance, Bharti Airtel, and M&M led the gainers, rising between 1 and 2 percent. Meanwhile, Sun Pharma, Hero MotoCorp, Trent, Hindalco, and Dr. Reddy’s were among the top losers, slipping 2 to 3 percent.
Shares of carmaker M&M climbed 2 percent, extending their two-day gains to nearly 4 percent, after Jefferies called the stock a "buying opportunity at attractive valuations," citing minimal impact from Tesla’s entry into the Indian market.
Bharti Airtel shares gained over 2 percent after partnering with Ericsson to deploy 5G Core technology, supporting the company's transition to a standalone 5G network. Shares of 360 ONE WAM gained 4 percent after Citi issued an upbeat broking revenue projection, driven by its recent acquisition of Batlivala & Karani Securities for Rs 1,884 crore.
Tata Investment shares advanced 7 percent after the Tata Capital board approved plans for an initial public offering. Shares of Bhagyanagar India surged 9 percent after the company received a Letter of Award for a Rs 245 crore order from the Maharashtra government.
Shares of Thangamayil Jewellers surged 20 percent on Tuesday, February 25, hitting the upper circuit and snapping a seven-day losing streak. The sharp rally came after the company announced the opening of a new showroom in Chennai's bustling T. Nagar area on February 23.
Shares of drugmaker Venus Remedies gained 2 percent after securing an exclusive licensing agreement with UK-based Infex Therapeutics.
"Technically, on the daily chart, Nifty has formed an inverted hammer candlestick pattern, indicating buying interest around 23,500 levels. As long as the index respects 23,500 levels, a pullback rally towards 22,700-22,800 could be possible," said Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates. "On the higher side, 22,700-22,800 will serve as a solid resistance zone. Sustenance below 22,500 levels could trigger fresh selling pressure."
All eyes are now on Nvidia’s earnings, which could be a key trigger for global tech sentiment. "This has a direct impact on the tech sector, which was one of the biggest drags on the market on February 24 and continues to weigh on sentiment today," Srivastava added.
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