Indian equity markets are expected to begin the week on a cautiously positive note on Monday, February 23, supported by improving global risk sentiment but tempered by lingering policy uncertainty and valuation concerns at higher levels.
Early indications point to a firmer opening for benchmark indices, with traders likely responding to relief across global markets after recent turbulence linked to trade policy shifts in the United States. However, the optimism is expected to remain measured rather than exuberant, with investors preferring selective positioning over aggressive risk-taking.
Global cues are marginally supportive, with Asian markets showing stability following a rebound on Wall Street. The easing of immediate fears around disruptive tariff escalation has reduced near-term downside risks, helping sentiment across emerging markets, including India. At the same time, investors remain conscious that global trade policy remains fluid and vulnerable to sudden reversals, which could quickly revive volatility. As a result, any early gains in Indian equities may face selling pressure as indices approach key resistance levels.
Domestically, the backdrop remains broadly constructive. Liquidity conditions are comfortable, and expectations of continued support from the central bank are helping cap downside risks, particularly for financial stocks. Banking and financial services are likely to stay in focus, with large lenders benefiting from steady credit growth expectations and improved asset quality trends. Select public sector banks may also see continued interest, though gains are expected to be stock-specific rather than sector-wide.
"The markets are poised for steady to positive start, as reflected by by firm trends in GIFT Nifty amid improving global risk sentiment after the US Supreme Court struck down President Trump's earlier reciprocal tariffs, and other factors. While near term sentiment has improved, markets may remain vulnerable to intermittent bouts of volatility as geopolitical and trade developments evolve," said R Ponmudi, a senior market analyst and CEO at broking and wealth tech firm Enrich Money.
From a technical perspective, the market appears to be in a consolidation phase. The Nifty is expected to find buying interest on declines towards its lower support zone, while upside momentum may weaken as it nears recent highs.
This suggests a range-bound session, with intraday swings driven more by global cues and stock-specific triggers than by any strong directional conviction. Traders are likely to adopt a buy-on-dips approach, while longer-term investors may continue to stagger fresh allocations rather than chase rallies.
Sectorally, cyclicals such as metals and capital goods could see selective buying, tracking global growth cues and commodity price movements. Defensive pockets like pharmaceuticals and FMCG may attract interest as portfolio hedges amid ongoing global uncertainty. The information technology sector could remain mixed, with sentiment tied closely to currency movements and expectations around overseas demand, particularly from the US market.
Overall, the tone for Monday’s session points to a steady but cautious start to the week. While supportive global signals and domestic liquidity provide a near-term cushion, the market lacks a strong catalyst to break decisively higher. Investors are likely to remain disciplined, focusing on fundamentally strong names and reacting swiftly to any changes in global risk sentiment. In the absence of fresh triggers, Indian equities may continue to trade within a defined range, balancing optimism about growth with caution over external risks and stretched valuations at the top end.