The Indian stock market concluded Thursday, February 20, on a subdued note, with the benchmark indices Sensex and Nifty 50 closing in the red. The Sensex slipped below the 75,800 mark, settling at 75,735.96, down by 203.22 points or 0.3%. Meanwhile, the Nifty 50 managed to hold just above the 22,910 level, closing at 22,913.15, a marginal decline of 19.75 points or 0.09%. The market’s lackluster performance was largely attributed to the monthly Futures and Options (F&O) expiry and growing concerns over potential U.S. tariffs on Indian goods, which triggered capital outflows.
As investors gear up for Friday’s trading session, all eyes are on the upcoming Purchasing Managers’ Index (PMI) data and the Reserve Bank of India’s (RBI) minutes of its latest monetary policy meeting. These factors are expected to play a pivotal role in shaping market sentiment. Analysts predict that the Nifty could find support around the 22,800 level, while resistance is likely near 23,150. A decisive breakout on either side could set the tone for the market’s next directional move.
Market Performance on February 20: A Mixed Bag
While the broader indices struggled, the BSE Sensex Next 50 index outperformed, closing at 74,880.72, up by 1,131.07 points or 1.53%. Sectoral performance was a mixed bag, with auto, metal, and realty stocks leading the gains. NTPC, Mahindra & Mahindra (M&M), Adani Ports, Tata Steel, and Tata Motors emerged as the top gainers on the Sensex, rallying between 1.3% and 3.5%. On the flip side, HDFC Bank, Maruti Suzuki, Tech Mahindra, HCL Tech, and ITC were among the top laggards, shedding between 1% and 2.5%.
The Nifty Midcap 100 and Nifty Smallcap 100 indices bucked the trend, closing higher by 1.3% and 1.4%, respectively. Sectorally, Nifty Auto, Nifty Media, Nifty Metal, Nifty PSU Bank, Nifty Realty, and Nifty Oil & Gas were the top performers, gaining between 1.1% and 2%. However, private banks and financial stocks dragged the market lower, with IT stocks also witnessing a slight decline.
Key Factors Influencing Market Sentiment
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that the market’s weakness was driven by rising concerns over potential U.S. tariffs on Indian goods, which could lead to inflationary pressures. He also pointed out that the latest Federal Reserve minutes indicated a possible delay in interest rate cuts, further dampening investor sentiment. However, Nair added that the broader market showed resilience, supported by expectations of improved consumption in the first quarter of FY26, fueled by moderating domestic inflation and the recent RBI rate cut.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities Ltd, noted that weak cues from Asian markets and sustained foreign institutional investor (FII) outflows have kept domestic investors on edge. Over the past few months, FIIs have been exiting Indian equities in large numbers, creating a risk-averse environment.
Technical Outlook: What Lies Ahead for Nifty and Sensex?
Rupak De, Senior Technical Analyst at LKP Securities, emphasized that the Nifty and Bank Nifty have been trading in a narrow range. For the Nifty, support is placed at 22,800, while resistance is seen at 23,150. A decisive move beyond these levels could trigger a significant directional shift in the market. Similarly, Shrikant Chouhan, Head of Equity Research at Kotak Securities, identified the 22,950/75,800 level as a crucial threshold. A move above this level could propel the Nifty towards the 23,050-23,100 range and the Sensex towards 76,100-76,300. Conversely, a breach of 22,800/75,500 could lead to a retest of the 22,725-22,650/75,200-75,000 levels.
Satish Chandra Aluri from Lemonn Markets Desk added that the Nifty 50 is finding strong support at 22,800. The key question is whether it will break this level to hit fresh lows or rebound above 23,000 in the final week of February’s F&O expiry. He also highlighted that the market is awaiting PMI data and RBI meeting minutes for further direction.
Sectoral Divergence and Investor Strategy
Ajit Mishra, SVP of Research at Religare Broking, pointed out that the ongoing divergence between banking and IT sectors continues to create uncertainty. While these two heavyweight sectors struggle to align, other sectors are not in a position to drive a major trend. However, the recent rebound in broader indices has provided some relief. Mishra advised investors to maintain a cautious stance on the index while focusing on select pockets across sectors, excluding FMCG, which are showing notable traction.
What Should Investors Do?
Given the current non-directional market texture, experts recommend level-based trading as the ideal strategy for day traders. Investors should closely monitor key support and resistance levels while keeping an eye on global cues, FII activity, and domestic macroeconomic data. Quality stock selection remains paramount, and aggressive positions should be avoided until a clear trend emerges.
As the market navigates through a phase of uncertainty, Friday’s session could prove decisive. Will the Sensex and Nifty rebound, or will the bears tighten their grip? The answer lies in the interplay of global and domestic factors, making it a day to watch closely for traders and investors alike.
Stay tuned for more updates and expert insights as the market unfolds its next chapter.