Indian Market In February: IT Crash, US Court Cancels Tariffs By Trump & More

The Indian equity markets were turbulent in February, marked by a tense geopolitical environment. While the benchmark indices showed resilience initially, the latter half of the month was dominated by a historic correction in technology stocks and by escalating tensions in the Middle East, which disrupted global logistics hubs.

Let’s take a closer look at everything that shaped the markets in February:

Sector Radar

The top three sectoral gainers and losers for the month

Nifty IT crashed as AI disruption fears (Anthropic’s Claude Code automation) threatened legacy revenue models and billable hours. Conversely, PSU Banks hit record highs on stellar Q3 profits and credit growth. Healthcare gained amid defensive rotation during the tech rout, while Consumer Durables gained on the back of recovering rural demand.

Precious Metals

Data as of 27 February 2026

Corporate Moves

Headlines and important updates from companies

INFY₹1,300.40 +0.89%

Infosys-Anthropic Strategic Deal: Infosys partnered with Anthropic to integrate Claude AI models into its Topaz platform, aiming for autonomous “agentic” AI solutions for global enterprises.

IDFCFIRSTB₹69.81 -2.74%

IDFC First Bank Fraud: The bank disclosed a ₹590-crore fraud at its Chandigarh branch involving siphoned Haryana government funds, leading to immediate stock pressure. However, the bank returned ₹583 crore including principle principal and interest, even though the investigation was ongoing.

RELIANCE₹1,345.00 -0.96%

Reliance Industries AI Investment: Reliance Industries to invest ₹10 lakh crore over the next seven years to build AI capabilities, including sovereign computer infrastructure and gigawatt-scale data centres.

BHARTIARTL₹1,879.30 +0.33%

Bharti Airtel to expand its digital lending business: Bharti Airtel announced plans to invest ₹20,000 crore to scale up its newly-licensed NBFC arm, Airtel Money, marking a strategic push into financial services.

UPL₹606.25 -2.67%

UPL’s Group Restructuring Plan: UPL shares dropped after announcing a group restructuring plan. Investors were concerned over leverage, post-reorganisation debt levels, and possible dilution from the split into two listed entities.

Market Spotlight

Key announcements you shouldn’t miss

• The launch of “Claude Code” and “Claude Cowork” tools wiped out ₹5.7 lakh crore in the IT market cap as fears of AI replacing coders peaked.
• Corporate earnings showed a mixed bag, with margins under pressure for IT firms while Banks maintained stable asset quality.
• US Department of Commerce slapped 126% punitive tariffs on Indian solar exports following the non-participation of key respondents in trade investigations.
• Geopolitical conflict in the Middle East led to the closure of Dubai’s airspace, rattling aviation and trade-dependent sectors
• Bullion prices fell earlier during the month due to CME margin hikes and aggressive profit-booking after reaching record highs, however they recovered to some extent during the month.

Macro View

Zooming out to key rates, trends, and global moves driving India’s economic story

• The MPC kept the repo rate unchanged at 5.25%, citing a “neutral” stance and stable inflation projections
• MOSPI shifted the CPI base year from 2012 to 2024, significantly reducing food weightage to reflect modern consumption
• January’s inflation spiked to 2.75% under the new series, though it remains well within the RBI’s 4% target
• India’s Q3 GDP grew at 7.8% under new base year series. The government has shifted the GDP base year to 2022-23 from 2011-12, to account for changing production and demand patterns.
• RBI announced new compensation rules for victims of digital banking frauds, aiming to boost consumer confidence in fintech
• The US Supreme Court declared Trump’s IEEPA-based tariffs illegal, however Trump immediately replaced the struck-down IEEPA measures by invoking Section 122 of the Trade Act. For India, this temporarily dropped effective tariffs from 18% to a 15% surcharge.

What Moved the Needle?

The headline that set the tone this month

Finance Minister Nirmala Sitharaman presented the Union Budget for FY2026-27 on February 01, 2026. Here’s what you need to know:

• Dedicated rare-earth corridors to be established in mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
• The new Income Tax Act, 2025, is to come into effect from 1st April, 2026.
• Buybacks to be taxed as Capital Gains for shareholders.
• Securities Transaction Tax (STT) on Futures to be raised to 0.05% from the present 0.02%.
• STT on options premium and exercise of options is proposed to be raised to 0.15% from the present rate of 0.1% and 0.125%, respectively.
• Public capex to be increased to ₹12.2 lakh crore in FY2026-27.
• Seven high-speed rail corridors to be set up between cities as ‘growth connectors.’
• India Semiconductor Mission 2.0 to be launched; biopharma receives an outlay of ₹10,000 cr.

FII vs DII Trends

Tracking India’s evolving market ownership trends

FII Activity: A Sharp Deceleration in Exits

Foreign Institutional Investors (FIIs) significantly dialed back their selling intensity in February, recording a net outflow of ₹6,640.78 crore. This marks a dramatic 83.97% reduction in selling activity compared to the heavy offloading of ₹41,435.22 crore seen in January. The exhaustion of the “risk-off” sentiment following the Union Budget 2026 announcements and a relative stabilization in global cues likely encouraged foreign funds to stem their aggressive exits.

DII Activity: Steady Support Amid Consolidation

Domestic Institutional Investors (DIIs) remained consistent net buyers for the month, providing a cushion of ₹38,423.11 crore to the markets. While this represents a 44.49% decrease from the massive ₹69,220.74 crore infusion in January, the domestic appetite remains robust. The moderation in buying suggests that fund managers are transitioning from an aggressive “buy-on-dips” strategy to a more selective, value-oriented approach as the market enters a post-budget consolidation phase.

IPO Watch

Mainboard IPOs — Companies That Went Public (Issue Size > ₹1,000 cr)

That’s a wrap for February!

From sector moves to macro trends and market risks, we’ve covered what mattered.

See you next month. Till then, stay informed and invest intelligently with Share.Market.