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The Indian stock market closed Wednesday's session, February 25, on a higher note, albeit with modest gains, as key indices erased most of their opening gains to settle near the day's low. IT stocks saw a sharp relief rally after a brutal sell-off in the previous session triggered by AI disruption fears.

Metal and auto stocks also supported the indices, offsetting losses in PSU Bank and FMCG counters, with the Nifty 50 eventually settling 0.23% higher at the 25,482 level, while the Sensex remained largely unchanged at the 82,274 level.

The broader markets, however, outperformed the frontline indices, with the Nifty Midcap 100 surging 0.60%, while the Nifty Smallcap 100 index closed even higher by nearly 1%, indicating that the market breadth decisively turned in favour of the bulls.

Sector-wise, the Nifty Metal rose 2.7%, while the Nifty Auto and Nifty Pharma indices each closed 1.85% higher. After nearly a 5% crash in the previous session, improved sentiment drove bulls back to the IT sector, with the Nifty IT closing 1.57% higher. However, the index remains down 20% in February so far.

On the losing side, the Nifty PSU Bank fell 0.39%, while the Nifty FMCG index shed 0.25%.

Vinod Nair, Head of Research, Geojit Investments, said, "Indian markets opened with a gap‑up, driven by upbeat global cues and a rebound in U.S. tech stocks as AI‑related uncertainty eased. Additionally, dovish signals from the BoJ supported regional sentiment, keeping Asian markets firm. However, the initial strength tapered off as renewed tariff‑focused comments from the US president reignited global trade concerns, limiting the day’s gains with depreciation in INR."

Looking ahead, geopolitical tensions such as U.S.–Iran developments, along with AI and tariff‑related news flow, are likely to shape market direction in the near term, he added.

(more to come)Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities and broader financial ma...

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