Stock Market Update Today, Feb 18: Sector Rotation in Play: PSU Banks Shine as FIIs Stay Cautious

Market Outlook:
 Indian markets are poised for a constructive start, supported by positive global cues and firm domestic undertones. With Gift Nifty indicating an optimistic opening and volatility cooling off, sentiment remains stable. The Nifty continues to hover near key resistance levels around the 25,700 zone, and sustained strength above this mark could open room for further upside. Market breadth remains healthy, reflecting selective buying across sectors rather than narrow index-driven movement.

FII and DII Activity:
 Institutional flows remained balanced, with both FIIs and DIIs reporting net buying in the cash segment. While FII participation has turned selective after recent volatility, domestic institutional flows continue to provide stability and absorb supply at higher levels. This alignment of flows suggests improving confidence and reinforces near-term market support.

Sector Activity:
 Sectoral performance was broad-based with PSU Banks emerging as clear outperformers, gaining over 2% led by strong participation in public sector lenders. IT, FMCG, Auto, and Consumer Durables also posted gains, reflecting diversified buying interest. On the flip side, Metals and select Oil & Gas counters witnessed mild profit booking. Overall, rotational momentum across sectors continues to define market direction.

Long, Short, Long Unwinding & Short Covering:
 Derivative positioning indicates a mildly bullish bias, with PCR levels above 1 suggesting stronger put writing relative to calls. Fresh long buildup was observed in select consumption and financial counters, while short buildup was visible in pockets of metals and select high-beta stocks. Long unwinding in recently outperformed counters indicates profit booking, whereas short covering in select heavyweights supported intraday recoveries and improved near-term sentiment.

Top 5 News Highlights:

1. Infosys announced a strategic AI collaboration to accelerate enterprise adoption and scale digital transformation initiatives.
2. BEL signed an MoU with a global defence player to strengthen indigenous electronics manufacturing capabilities.
3. Cochin Shipyard emerged as L1 bidder for a key Indian Navy project, improving order book visibility.
4. Texmaco Rail secured a sizable wagon order, boosting execution pipeline strength.
5. BHEL received a major captive power plant order, enhancing revenue visibility in the industrial capex segment.

 Overall, the market remains in a consolidation phase with institutional divergence and sector rotation shaping near-term trends. Investors are advised to stay selective and monitor key technical levels closely.