Strong Start Fades Into Weak Finish as Markets Fail to Hold Gains and Nifty Ends Lower

Market Fails to Hold Opening Gains Again as Nifty Slips Below 25,500

Index	Price	Change	% Chg
Nifty 50	25,496.55	14.05	+0.06%
Nifty Bank	61,187.70	144.35	+0.24%
Nifty Financial	28,309.85	29.80	-0.11%
BSE SENSEX	82,248.61	27.46	-0.03%

Indian stock markets ended flat on February 26, 2026, after another volatile session in which early gains faded and the Nifty once again slipped below the key 25,500 level, reflecting cautious investor sentiment. Despite a gap-up start and strong global market cues, domestic benchmarks struggled to sustain momentum and traded within a narrow range for most of the day.

The Nifty 50 closed at 25,496.55, up 0.06 percent, while the BSE Sensex ended marginally lower at 82,248.61, down 0.03 percent. Both indices fluctuated between gains of around 0.4 percent and similar losses during the session, highlighting indecisive market conditions.

After opening higher, the Nifty slipped to an intraday low near 25,400 amid intermittent selling pressure before recovering in the final hour of trade. The index traded within a range of about 172 points, indicating subdued volatility and cautious trading activity.

The India VIX declined 3.15 percent to 13.06, suggesting that volatility expectations remain moderate despite the choppy market movement.

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Pharma and PSU Banks Supported Markets While Financial Stocks Dragged Indices

Sectoral trends were largely positive, with 14 out of 16 sectors ending in the green, but weakness in heavyweight financial stocks prevented the market from sustaining gains.

Public sector banks emerged as one of the strongest performers, with the PSU Bank index rising around 1 percent, supported by buying interest in State Bank of India after brokerage CLSA reiterated its “outperform” rating citing strong liquidity coverage ratio and profitability outlook.

Pharma stocks also remained strong with the Nifty Pharma index rising 1.1 percent, extending its five-session gain to nearly 3.9 percent. Analysts attributed the rally to sector rotation as investors moved into defensive sectors amid uncertain market conditions.

Other sectors that gained included:

• Oil & Gas up 0.87%

• Auto up 0.80%

• Metal up 0.39%

• Realty up 0.23%

However, weakness in financial heavyweights offset broader sectoral gains. HDFC Bank declined about 1 percent, emerging as the biggest drag on the indices due to its large weightage.

Other major Sensex losers included:

• Power Grid Corporation

• Trent

• Bajaj Finserv

• Axis Bank

• Asian Paints

• UltraTech Cement

• NTPC

• Eternal

The selling pressure in banking stocks limited the overall market upside.

Top Stock Gainers – Nifty 50

Top Stock Losers – Nifty 50

IT Stocks Recover Intraday but Fail to Sustain Gains

IT stocks showed signs of recovery after a sharp correction earlier in the month but failed to sustain intraday gains. The Nifty IT index rose nearly 2 percent during the session but ended only 0.1 percent higher, reflecting continued uncertainty in the sector.

The IT index has declined nearly 20 percent in February, marking one of the sharpest sectoral corrections in recent years. Concerns around artificial intelligence disruption and global technology spending have weighed heavily on investor sentiment.

The inability of IT stocks to sustain gains contributed to the market’s lack of momentum.

Top Sector Gainers

Top Sector Losers

Broader Markets Remain Resilient Despite Range-Bound Indices

Broader markets showed relatively better performance compared with benchmark indices, indicating selective buying interest.

• Midcap index gained about 0.7%

• Smallcap index closed flat

Market breadth remained positive with:

• 1,686 stocks advancing

• 1,460 stocks declining

Stock-specific developments included:

• XTGlobal rose 20% after AI project order

• Balu Forge gained 10% after ammunition supply MoU

• Sanofi Consumer Healthcare rose 5% on strong earnings

• Foseco India fell 2% after profit declined 35%

Midcaps Outperform While Smallcaps Stay Flat

Broader markets showed mixed performance, with midcap stocks outperforming benchmarks while smallcaps remained largely unchanged.

The midcap index rose about 0.7 percent, reflecting continued investor interest in selective growth stocks despite the lack of momentum in large-cap indices.

Smallcap stocks ended largely flat, suggesting some caution among investors after the strong rally seen in broader markets over recent months.

Market breadth remained positive, with roughly 1,686 stocks advancing compared with about 1,460 declining, indicating that buying interest remained reasonably broad-based despite the flat index close.

More than 60 stocks hit 52-week highs, highlighting pockets of strong stock-specific momentum.

The divergence between benchmark indices and broader markets suggests that investors continue to focus on individual stock opportunities rather than index-level positioning.

Here’s What Happened Today and Why Traders Reacted

Markets remained volatile as investors booked profits and avoided aggressive buying despite positive global cues.

Key Developments

• Gap-up opening followed by selling pressure

• Nifty slipped to 25,400 intraday

• Pharma and PSU banks gained

• Financial stocks dragged markets

• Volatility remained moderate

Why Traders Reacted

• Caution ahead of US-Iran negotiations

• Upcoming GDP data release

• Technical resistance near 25,550

• Weak momentum indicators

Investor sentiment improved slightly in late trade after reports of meetings between Indian and US commerce officials raised hopes of progress in trade negotiations.

Technical Indicators Suggest Market Weakness May Continue

Technical indicators suggest that markets remain in a consolidation phase with weak momentum.

The Nifty continues to trade below the 21-day EMA, indicating limited strength in the current trend. The RSI has entered a bearish crossover, suggesting weakening momentum.

Key levels to watch:

Nifty Levels

• Support: 25,380–25,350

• Strong support: 25,300

• Resistance: 25,550–25,600

• Breakout level: 25,660

A sustained move above 25,660 could trigger an upside rally toward 25,800, while a break below 25,300 may lead to further downside.

What This Means for Traders and Investors

The continued failure of the market to sustain gains indicates cautious sentiment among investors despite strong sectoral participation.

Short-term impact on traders

• Range-bound market conditions

• Profit booking at higher levels

• Level-based trading preferred

• Limited breakout signals

Impact on investor portfolios

• Pharma and PSU bank stocks gaining

• Financial stocks under pressure

• IT sector stabilising

• Select midcaps outperforming

The rupee strengthened during the session supported by foreign inflows and softer commodity prices, though gains were later trimmed as importers increased dollar demand.

For investors, the market’s inability to sustain gains suggests that consolidation may continue until strong triggers such as economic data, global developments or corporate earnings provide clearer direction.

• Nifty 50
• Bank Nifty
• Sensex

FAQs Strong Start Fades Into Weak Finish

1. Why did Nifty fail to hold above 25,500 despite most sectors closing in the green?

Nifty failed to sustain above the 25,500 level mainly because selling in heavyweight stocks such as HDFC Bank and financial stocks offset gains in sectors like pharma, PSU banks and oil & gas. Even though 14 out of 16 sectors advanced, weakness in large-cap stocks prevented the index from maintaining upward momentum.

2. What caused Indian stock markets to remain range-bound despite positive global market trends?

Indian markets remained range-bound due to cautious investor sentiment ahead of key global developments such as US–Iran negotiations and upcoming economic data releases including India’s GDP figures. Profit booking at higher levels and technical resistance near 25,550–25,600 also limited the upside.

3. How did the fall in HDFC Bank shares impact Sensex and Nifty today?

HDFC Bank’s decline had a significant impact on the benchmark indices because of its heavy weight in both Sensex and Nifty. The stock fell around 1 percent and offset gains from sectors such as pharma and PSU banks, preventing the indices from closing higher.

4. Why are pharma stocks attracting investor interest during volatile market conditions?

Pharma stocks are attracting investors because they are considered defensive during uncertain market conditions. As market volatility increases, investors often shift toward sectors with stable earnings visibility such as healthcare and pharmaceuticals, which explains the recent sector rotation.

5. What technical signals indicate that Nifty may remain weak in the near term?

Technical indicators suggest weakness as Nifty continues to trade below the 21-day EMA and the RSI has entered a bearish crossover. These signals indicate limited upside momentum and suggest that the index could test support levels near 25,300 if buying interest remains weak.

6. Why did midcap stocks outperform benchmark indices in today’s trading session?

Midcap stocks outperformed because investors continued selective buying in growth-oriented companies even as large-cap stocks faced resistance at higher levels. Strong stock-specific activity and earnings visibility supported midcap performance.

7. How should traders approach the market after another volatile and flat closing session?

Traders may prefer a level-based approach as markets remain range-bound between support near 25,300 and resistance near 25,600. Fresh long positions may be considered only after a sustained breakout above resistance levels, while short-term traders may continue focusing on sector-specific opportunities.