WEEKLY MARKET RESEARCH REPORT 16-20 February | Scrolls

by Karnivesh | 2026

WEEKLY MARKET RESEARCH REPORT 16 - 20 Feb 2026.pdf

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The week of 16–20 February unfolded not as a dramatic turning point for Indian equities, but as a moment of pause, reflection, and quiet validation. After weeks of strong moves driven by the Union Budget and the RBI’s policy stance, the market chose to consolidate rather than surge ahead. Prices moved, but without urgency. The Nifty hovered in a well-defined range, ending the week near 25,571, signalling that investors were comfortable holding ground at higher levels while reassessing what truly deserved capital.

At the heart of the week was the climax of the Q3 earnings season. Results did not ignite fresh excitement across the board, but they told a clear story of divergence. Domestic-facing sectors banks, infrastructure, defence, and select PSUs continued to deliver steady, confidence-building numbers. Order books were healthy, execution commentary was constructive, and balance sheets looked far stronger than in past cycles. These results reinforced a growing belief that India’s policy-driven capex push is no longer just a promise, but a reality visible in earnings and cash flows.

In contrast, globally exposed sectors struggled to find footing. IT services, weighed down by cautious guidance, uncertain client spending, and rising global bond yields, remained under pressure throughout the week. Export-oriented auto and cyclical names also saw selective weakness, reflecting softer external demand and margin concerns. This contrast defined the market’s internal character: strength beneath the surface, masked by the drag of index-heavy global sectors.

Perhaps the most important development of the week was not price action, but participation. Domestic institutional investors emerged once again as the market’s stabilising force. Whenever global cues triggered intraday weakness be it rising US yields or risk-off sentiment local institutions stepped in, particularly in banks and core domestic themes. Their steady buying absorbed volatility and prevented sharper drawdowns, highlighting how the market’s centre of gravity has shifted decisively toward domestic capital. Foreign investors, while net buyers over the month, remained more cautious and reactive, reinforcing this new balance of power.

Day-to-day trading reflected this mood of digestion. The week began strongly, carrying forward optimism from earlier sessions. Midweek saw flatter opens and two-way intraday swings as investors processed earnings and global data, but without conviction to push indices decisively higher or lower. Friday closed with a familiar pattern: volatility during the session, followed by a bank-led recovery into the close. The message was consistent selling pressure existed, but it lacked follow-through.

By this point, the major macro events of the quarter were largely behind the market. The Budget and RBI policy had been digested, debated, and priced in. What the market was now doing was checking the math asking whether the stories told by policymakers were being confirmed by company results and data. For the most part, they were. That validation encouraged a shift in behaviour: buying on dips, but avoiding aggressive chasing. The rally phase had given way to a stock-picker’s market.

Volatility, though slightly higher, remained contained. There was caution, but no fear. The India VIX stayed in the mid-teens, signalling hedging rather than panic. Beneath the calm surface, sector rotation continued, rewarding earnings visibility and punishing uncertainty. Infrastructure, defence, and PSU banks emerged as structural winners, while IT remained tethered to global macro tides.

Looking ahead, the market appeared aware of its risks but not intimidated by them. Global rates, US macro data, and the sustainability of foreign inflows remained key variables. Large-cap earnings still held the power to sway sentiment. Geopolitical and energy risks lingered in the background. Yet, the underlying tone suggested confidence that domestic growth, policy continuity, and institutional liquidity could cushion most external shocks—at least in the near term.

In essence, the week marked a transition. Indian equities moved further away from a macro-event-driven rally and deeper into an earnings-led, selective phase. Broad index moves became quieter, while dispersion increased. It was the kind of week that doesn’t grab headlines but quietly strengthens the foundation for what comes next.