Indian equity markets are expected to begin Wednesday’s session, February 25, on a steadier footing after the sharp volatility seen in the previous trading day, with early indications pointing to a mildly positive opening. Sentiment is being supported by relatively stable global cues and expectations of bargain hunting at lower levels, even as investors remain cautious about the durability of any rebound. Market participants are likely to test the strength of near-term supports early in the session, while upside moves may face resistance as traders stay selective and light on leverage.
The previous session’s sell-off has left the benchmarks technically fragile, and that context is likely to shape trading through the day. While short-term indicators suggest the possibility of a relief bounce, the broader structure still points to consolidation rather than a decisive trend reversal. Investors are expected to closely watch whether buying interest emerges in heavyweight stocks that have corrected sharply, as sustained participation from these counters will be critical for any meaningful recovery in the indices.
In the absence of strong follow-through, markets may slip back into a narrow range marked by intermittent profit-taking, say market analysts.
“The markets are likely to see a flat to mildly positive start, tracking a modest overnight recovery on Wall Street and a constructive tone across Asian markets in early trade. However, the overall undertone is expected to remain cautious, as sentiments stay subdued amid persistent US-Iran geopolitical tensions and firm crude oil prices, which continue to pose a macroeconomic challenge for India,” said R Ponmudi .
Sectorally, divergences are likely to persist. Information technology stocks remain a key overhang on sentiment, as concerns around demand visibility, pricing pressure and evolving technology cycles continue to weigh on valuations. Any further weakness in large IT names could cap broader market gains. In contrast, pockets of strength may be seen in select banking and financial stocks, particularly those perceived to have relatively stable balance sheets and improving asset quality. However, the banking space is also expected to trade with caution amid lingering concerns over margins and deposit growth, leading to stock-specific moves rather than a uniform sector rally.
Mid- and small-cap stocks are likely to remain volatile, with investors showing a preference for quality and earnings visibility over momentum-driven trades. After recent corrections, selective buying could emerge in fundamentally strong names, but risk appetite in the broader market remains restrained. Traders are expected to stay nimble, focusing on stocks with clear triggers such as earnings updates, management commentary or sector-specific developments.
From a broader perspective, global cues will continue to influence intraday sentiment, particularly movements in Asian markets and overnight trends in US equities. Currency movements, crude oil prices and signals on foreign investor flows will also be closely monitored, as these factors have played a significant role in recent market swings. Any resurgence of foreign selling could quickly shift sentiment back to risk-off mode.
Overall, the tone for Wednesday’s trade is expected to be cautious but slightly constructive, with the possibility of a technical rebound tempered by concerns about sustainability. Markets are likely to remain range-bound, with investors focusing on capital preservation and selective opportunities rather than aggressive positioning. A clearer direction may only emerge once there is greater clarity on global trends and stronger confirmation from domestic market breadth.