Markets Slip 3% This Week After 6% Post-Trade-Deal Rally; IT Stocks Drag Indices Amid AI-Led Volatility
📍 India
📅 Week Ending: 15-02-2026
India’s equity markets witnessed heightened volatility this week, with benchmark indices correcting nearly 3% after a sharp 6% gap-up rally in the previous session triggered by optimism surrounding a U.S. trade agreement announcement.
The earlier surge followed positive global cues after developments related to U.S. trade negotiations, which boosted investor sentiment across emerging markets, including India. However, the current week reflected profit booking and sectoral weakness, particularly in the Information Technology (IT) segment. The BSE Sensex and NIFTY 50 opened the previous week with a significant upside gap exceeding 6%, reflecting strong global risk appetite. However, during the ongoing week, indices reversed gains, shedding close to 3% amid sector-specific pressure and cautious investor positioning.
Market participants cited valuation concerns and global tech sentiment shifts as key contributors to the correction. The IT sector emerged as the primary laggard this week. Stocks across major technology firms experienced aggressive selling pressure following global discussions surrounding Artificial Intelligence (AI) developments and their potential impact on traditional IT service models.
Companies such as Infosys and Tata Consultancy Services witnessed notable declines, contributing significantly to the broader market weakness.
Analysts suggest that rapid advancements in AI and automation could reshape revenue models for outsourcing-heavy IT firms, prompting investors to reassess earnings visibility in the near term.
Foreign Institutional Investors Turn Net Buyers
Despite the broader market correction, data indicates that Foreign Institutional Investors (FIIs) have turned net buyers in the cash segment during the week. This trend signals sustained long-term confidence in Indian equities, even amid short-term volatility.
FII inflows into the cash market suggest strategic accumulation at relatively lower levels following the correction.
Outlook for the Coming Week
Market experts believe that:
Volatility may persist due to global tech sentiment.
FII participation remains a key support factor.
IT sector movements will influence index direction.
Domestic macroeconomic indicators and global developments will remain closely monitored.
Investors are advised to remain selective and monitor sector rotation patterns. While short-term corrections are visible, institutional positioning indicates underlying structural strength in the broader market.
Disclaimer: This article is for informational purposes only and should not be considered investment advice. Market investments are subject to risks. Investors should consult certified financial advisors before making decision
