The start of the fresh week is likely to be negative for domestic markets amid weak global and domestic cues. Gift Nifty is ruling at 25,500, against Friday’s close of 25,471 on the NSE. Analysts are concerned that IT stocks are failing to demonstrate any meaningful resilience amid weeks of intense selling pressure.
Ponmudi R, CEO of Enrich Money, said: Indian equity markets are likely to remain increasingly sensitive to global cues following last week’s sharp correction, which was led predominantly by technology stocks. “Persistent concerns around AI-driven disruption continue to act as a key overhang for IT heavyweights, reversing part of the optimism earlier sparked by the US–India interim trade framework and reinforcing a broader risk-off undertone. Stabilization within the IT sector will be crucial for rebuilding broader market confidence,” he added. The Nifty IT index has fallen nearly 15 per cent in the last one month and some of the stocks have fallen over 50 per cent.
FII Participation has turned mixed and cautious in recent sessions, while steady DII inflows offer a degree of domestic support. Meanwhile, mutual funds have turned net sellers, offloading over ₹4,000 crore so far in February.
“Overall capital flows still reflect uncertainty, as investors reassess elevated valuations and closely monitor upcoming global triggers, including the US Fed minutes, PCE inflation data, and PMI releases,” said Ponmudi. In the near term, sentiment remains fragile, with markets likely to trade in a consolidation phase until clearer direction emerges from global macro signals, he further said.
Meanwhile, the Q3 performance of India Inc was better.
Q3-FY26 corporate earnings concluded on a strong note, marking the fourth consecutive quarter of double-digit earnings growth, said Motilal Financial Research. “A key highlight of the quarter was the improved sectoral breadth of earnings growth. Of the 27 sectors under our coverage, 19 delivered double-digit growth, five reported single-digit growth, and three sectors experienced a decline in PAT,” it said in a report.
A key overhang in the current environment are ongoing disruptions in the IT services sector and their potential impact on other sectors and remains a key monitorable in the near term, the domestic brokerage added.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said: “In February, till 13th, FIIs were buyers on most days. Following the India-US trade agreement, which improved market sentiment, FIIs were buyers on seven out of the 11 trading days and sold only on four days. However, data as on 13th February tells us that FIIs have net sold equity for ₹1,374 crore so far in February through 13.
“The net figure has been skewed by the big sell figure of ₹7,395 crore on 13th when the Nifty fell by 336 points and the week witnessed massive selling in IT stocks, reeling under the Anthropic shock. It is possible that the FIIs sold IT stocks heavily in the cash market when the IT index crashed by 8.2 per cent during the week ended February 13,” he said.
“Sentiment in the Indian market has improved significantly after the fiscally-prudent and growth-oriented 2026 Budget and the US-India trade agreement. Given the improving prospects for corporate earnings in FY27, the market valuations, particularly for large caps, are fair. Therefore, once the dust over the IT sector settles down, FIIs are likely to turn buyers, going forward. If the unwinding of the AI trade in the US during the last few days is extended, it will be a trigger for FIIs to turn buyers in India, which is a non-AI market,” he added.
Meanwhile, equities across the Asia region are down marginally in early deals on Monday.
Published on February 16, 2026