The Indian stock market witnessed sharp intraday losses on Thursday, February 12, due to profit booking. The benchmark Sensex fell over 450 points, and the NSE Nifty 50 slipped close to the 25,800 level amid mixed global cues.
The domestic market is witnessing profit booking across segments despite India’s healthy macroeconomic outlook and fresh buying by foreign institutional investors (FIIs).
The India-US tarde deal, a balanced Budget 2026, and easing geopolitical tensions have supported market sentiment. The Sensex is up nearly 2% in February so far after two consecutive months of losses.
Despite significant positives, the market is struggling to sustain a rally. The sell-on-rise trend continues, indicating that investors remain cautious about the durability of the ongoing uptrend.
Why is the stock market down?
With key triggers such as the Budget and trade deals now behind them, investors’ focus has shifted to corporate earnings. However, mixed results have failed to lift market sentiment.
Another factor weighing on the market sentiment is a sharp selloff in the IT space amid concerns over AI-led disruption.
“The fall is largely driven by sector-specific pressure, especially from the IT pack. The Nifty IT index is down nearly 5%, and that decline is weighing heavily on overall market sentiment. While other sectors are trying to provide support, it hasn’t been enough to offset the drag from IT,” said Ajit Mishra, SVP of Research at Religare Broking.
“The weakness in mid- and small-caps looks like normal profit-taking after a strong recovery in recent sessions. In fact, the mid-cap index was close to making a fresh record high. So, some correction in these segments is expected and healthy,” said Mishra.
What should investors do?
Mishra expects volatility to persist in the near term. However, he recommends buying the dips.
“The strategy should be to buy on dips, particularly in the benchmark indices. Except for IT, most other sectors are holding up reasonably well,” said Mishra.
According to VK Vijayakumar, Chief Investment Strategist, Geojit Investments, sectors like automobiles, jewellery, hotels, segments of capital goods, telecom and financials are doing well on the earnings front and have the potential to continue to do well.
Vijayakumar believes tech stocks, reeling under the Anthropic shock, are unlikely to recover soon.
“The sharp dip in the ADRs of top Indian IT companies in the US yesterday indicates that Indian IT will continue to struggle. The switch from IT to other segments will help performing stocks in performing sectors,” said Vijayakumar.
Vijayakumar underscored that even with occasional profit booking, the market’s undertone will remain resilient, mainly because FIIs are turning buyers.
“The fact that FIIs were buyers in six of the last seven trading sessions indicates that at least the trend of sustained selling is over. In the near-term, the market is likely to consolidate around the current levels with an upward bias,” said Vijayakumar.
Read all market-related news here
Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
About The Author
