Market Wrap

Indian equities navigated a turbulent week marked by sharp swings triggered primarily by geopolitical developments. The markets opened with a gap-down but staged a swift recovery over the first three sessions, pushing the Nifty toward the 25,900 zone. However, renewed tensions mid-week sparked aggressive selling, dragging the index close to the 25,400 level.

A rebound on Friday helped limit the damage, with the Nifty closing the week up 0.39% at 25,571. The broader market remained under pressure, as midcap and smallcap stocks faced intermittent selling. In contrast, PSU Bank stocks continued to outperform, providing pockets of strength despite overall volatility.

Globally, cues were mixed. U.S. markets ended on an uneven note, and the cautious sentiment spilled over into European and Asian markets. Investor anxiety remains elevated due to escalating tensions between the United States and Iran, including a high-stakes deadline warning from former U.S. President Donald Trump. Markets fear that any military escalation could trigger a sharp risk-off move across global assets, while diplomatic progress may provide relief.

Volatility indicators remained elevated, reflected in the Nifty’s wide weekly trading band and February’s expanded range of nearly 1,770 points. Institutional flows were selective, with no clear signs of aggressive buying support emerging yet.

What's Ahead

The coming week coinciding with the February F&O expiry is expected to remain highly volatile. Traders will closely monitor geopolitical developments involving the U.S. and Iran, as well as movements in crude oil prices and global bond yields.

In addition, key U.S. macroeconomic data releases and commentary from Federal Reserve officials could significantly influence global risk appetite. Unless foreign and domestic institutional investors step up buying meaningfully, the market may continue to trade in a broad range with a cautious or negative bias near resistance levels.

Overall, the near-term trajectory will likely hinge on external triggers rather than domestic fundamentals, keeping traders alert for sudden swings in sentiment.

Institutional Activity

Market Snapshots

Sectoral Performance

Technical Outlook

Nifty 50

NIFTY 50 ended with modest gains after witnessing value buying and short covering following the previous session’s sharp decline, indicating a recovery attempt rather than a decisive trend reversal. The index maintained a positive intraday bias with strong participation from metals, power, and select heavyweights, while persistent weakness in IT capped sharper upside. Momentum indicators show early improvement, with RSI rising toward the neutral 50 zone, suggesting strengthening but not yet robust bullish momentum. The price action indicates that the index is attempting to build a base in the 25,200–25,800 range, with immediate support placed at 25,341 followed by 25,200, where buying interest may emerge. On the upside, resistance is seen at 25,798 and 25,940; a sustained move above this zone could trigger fresh upside momentum, while failure to hold above supports may revive selling pressure and keep the index range-bound with a cautious bias.

Bank Nifty

BANK NIFTY outperformed the broader market, supported by strong buying in PSU banks and steady participation from private sector heavyweights, reflecting improving sentiment across the banking space. The index traded firmly throughout the session with a steady upward trajectory, suggesting accumulation rather than short-term covering alone. Momentum indicators are strengthening, with RSI rebounding toward the 60 level, which typically signals emerging bullish momentum and potential continuation if supported by follow-through buying. Immediate supports are placed at 60,672 and 60,362, levels that may act as buying zones on dips, while resistance is seen at 61,672 and 61,982. A sustained breakout above the upper resistance band could open the door for further upside, whereas rejection near these levels may result in consolidation after the recent rise.

Nifty Financial Services

FINNIFTY closed higher, driven by broad-based buying across insurance companies, NBFCs, and select banking stocks, indicating steady institutional participation within the financial space. The index maintained positive breadth, suggesting underlying strength despite mild weakness in a few heavyweight constituents. Technically, the index appears to be consolidating within a rising structure, with buyers active on dips. Immediate support levels are placed at 27,991 and 27,847, which may provide a cushion against downside volatility. On the upside, resistance is seen at 28,458 and 28,602; a decisive move above this zone could confirm a continuation of the uptrend, while failure to break higher may lead to sideways consolidation as markets await stronger triggers.

Sensex

SENSEX ended higher with broad support from power, infrastructure, FMCG, and financial stocks, reflecting rotational buying across sectors even as IT stocks remained under pressure. The index’s positive breadth and recovery from lower levels indicate underlying resilience despite capped gains at higher levels. Technically, the index is trading within a consolidation band after recent volatility, with buyers stepping in on declines. Immediate support is placed at 82,007 followed by 81,472, levels that are crucial to maintain the current recovery structure. On the upside, resistance is seen at 83,737 and 84,272; a sustained move above these levels could signal renewed bullish momentum, while inability to cross them may keep the index range-bound in the near term.