<p>Indian equities are expected to trade range-bound during this week amid mixed global cues and continued sector-specific volatility. With major earnings announcements largely behind us, markets are likely to transition into a liquidity- and commentary-driven phase. High-frequency indicators such as GST collections, PMI readings and auto sales will be monitored for demand momentum. Leadership is likely to remain with earnings-backed large caps and defensives, while globally exposed technology names may witness intermittent volatility as AI-led business models evolve.</p>.<p>Improved clarity on the fine print of the India–US trade agreement has strengthened visibility for export-oriented sectors. Key economic data to be released this week includes Japan GDP, India WPI, UK CPI, US initial jobless claims and manufacturing PMI. Sustained FII participation and stability in global yields will remain critical in shaping near-term direction.</p>.<p>Last week, equity markets witnessed broad-based weakness, with benchmark and broader indices closing in the red. The Nifty50 declined 1.2%, while the Nifty Midcap100 fell 0.4% and the Nifty Smallcap100 dropped 1.0%. Sectorally, performance was polarised. Nifty PSU emerged as the top gainer (+3.0%), followed by Healthcare index (+1.7%), Nifty Auto (+1.5%) and Financial Services (+1.2%), indicating selective strength in rate-sensitive and value-oriented pockets. On the flip side, Nifty IT was the worst hit, plunging (-10.1%) amid global technology sell-off and artificial intelligence–related disruption concerns, followed by Nifty Energy (-1.8%) and Nifty Metal (-1.4%).</p>.<p>Healthcare strength was earnings-led and supported by improving domestic demand trends. The Indian pharma market grew 11.5% YoY in January 2026, moderating from December but remaining robust. Chronic therapies continued to outpace acute, growing 16% YoY, driven by strong traction in Cardiac, Anti-diabetic and VMN segments. On a rolling 12-month basis, industry growth stood at 9.1% YoY, with chronic therapies maintaining superior momentum. The data reinforces the structural shift toward chronic therapies amid India’s changing demographic profile and supports sustained earnings visibility for quality pharma franchises.</p>.<p>Within IT, the recent underperformance reflects concerns that generative AI could reduce traditional outsourcing demand by improving automation and productivity. However, past trends suggest that new technologies tend to expand the opportunity set rather than displace Indian IT firms. During earlier shifts such as cloud adoption, IT companies were not displaced but instead helped enterprises implement and scale those technologies. A similar pattern could emerge with AI, where global enterprises partner with established IT vendors to integrate AI tools across business functions. While near-term pricing pressure and project reprioritisation may weigh on growth, we believe the structural outlook will remain contingent on the adoption curve of AI solutions and the extent to which IT services firms can participate meaningfully in this evolving value chain.</p>.<p>From a macro standpoint, retail inflation rose to 2.75% in January under the new 2024-base CPI series, driven primarily by food and precious metal prices. Despite the base revision limiting direct comparison with the earlier series, inflation remains well within RBI’s tolerance band, reinforcing expectations of policy stability and supportive real rates. This contained inflation environment continues to anchor domestic risk sentiment.</p>.<p>In the Capital Markets segment, liquidity trends further strengthen the backdrop. January witnessed a 25% MoM rise in total ADTO to Rs 594 lakh crore, led by robust participation across cash and derivatives segments. Demat additions of 3.6 million highlight sustained retail engagement, even as primary market fundraising moderated, indicating that flows are currently concentrated in secondary markets. Importantly, FII sentiment toward India has turned more constructive, with net equity purchases of over ~Rs 6,000 crore so far this month (up to February 12), marking a reversal after prolonged selling. Reduced tariff uncertainty, macro stability and resilient earnings expectations have collectively improved global investor confidence.</p>.<p>India’s life insurance industry growth moderated to ~9% YoY in January (individual WRP), easing from elevated levels seen post GST exemption. Private players grew 7% YoY, while Life Insurance Corporation of India sustained stronger growth of ~15% YoY for the fourth consecutive month, indicating continued market share gains and steady underlying demand. The moderation appears cyclical rather than structural, with underlying premium demand intact and growth likely to vary across players based on distribution strength and product mix.</p>.<p><em>(The writer is Head of Research, Wealth Management, Motilal Oswal Financial Services Limited)</em></p>
<p>Indian equities are expected to trade range-bound during this week amid mixed global cues and continued sector-specific volatility. With major earnings announcements largely behind us, markets are likely to transition into a liquidity- and commentary-driven phase. High-frequency indicators such as GST collections, PMI readings and auto sales will be monitored for demand momentum. Leadership is likely to remain with earnings-backed large caps and defensives, while globally exposed technology names may witness intermittent volatility as AI-led business models evolve.</p>.<p>Improved clarity on the fine print of the India–US trade agreement has strengthened visibility for export-oriented sectors. Key economic data to be released this week includes Japan GDP, India WPI, UK CPI, US initial jobless claims and manufacturing PMI. Sustained FII participation and stability in global yields will remain critical in shaping near-term direction.</p>.<p>Last week, equity markets witnessed broad-based weakness, with benchmark and broader indices closing in the red. The Nifty50 declined 1.2%, while the Nifty Midcap100 fell 0.4% and the Nifty Smallcap100 dropped 1.0%. Sectorally, performance was polarised. Nifty PSU emerged as the top gainer (+3.0%), followed by Healthcare index (+1.7%), Nifty Auto (+1.5%) and Financial Services (+1.2%), indicating selective strength in rate-sensitive and value-oriented pockets. On the flip side, Nifty IT was the worst hit, plunging (-10.1%) amid global technology sell-off and artificial intelligence–related disruption concerns, followed by Nifty Energy (-1.8%) and Nifty Metal (-1.4%).</p>.<p>Healthcare strength was earnings-led and supported by improving domestic demand trends. The Indian pharma market grew 11.5% YoY in January 2026, moderating from December but remaining robust. Chronic therapies continued to outpace acute, growing 16% YoY, driven by strong traction in Cardiac, Anti-diabetic and VMN segments. On a rolling 12-month basis, industry growth stood at 9.1% YoY, with chronic therapies maintaining superior momentum. The data reinforces the structural shift toward chronic therapies amid India’s changing demographic profile and supports sustained earnings visibility for quality pharma franchises.</p>.<p>Within IT, the recent underperformance reflects concerns that generative AI could reduce traditional outsourcing demand by improving automation and productivity. However, past trends suggest that new technologies tend to expand the opportunity set rather than displace Indian IT firms. During earlier shifts such as cloud adoption, IT companies were not displaced but instead helped enterprises implement and scale those technologies. A similar pattern could emerge with AI, where global enterprises partner with established IT vendors to integrate AI tools across business functions. While near-term pricing pressure and project reprioritisation may weigh on growth, we believe the structural outlook will remain contingent on the adoption curve of AI solutions and the extent to which IT services firms can participate meaningfully in this evolving value chain.</p>.<p>From a macro standpoint, retail inflation rose to 2.75% in January under the new 2024-base CPI series, driven primarily by food and precious metal prices. Despite the base revision limiting direct comparison with the earlier series, inflation remains well within RBI’s tolerance band, reinforcing expectations of policy stability and supportive real rates. This contained inflation environment continues to anchor domestic risk sentiment.</p>.<p>In the Capital Markets segment, liquidity trends further strengthen the backdrop. January witnessed a 25% MoM rise in total ADTO to Rs 594 lakh crore, led by robust participation across cash and derivatives segments. Demat additions of 3.6 million highlight sustained retail engagement, even as primary market fundraising moderated, indicating that flows are currently concentrated in secondary markets. Importantly, FII sentiment toward India has turned more constructive, with net equity purchases of over ~Rs 6,000 crore so far this month (up to February 12), marking a reversal after prolonged selling. Reduced tariff uncertainty, macro stability and resilient earnings expectations have collectively improved global investor confidence.</p>.<p>India’s life insurance industry growth moderated to ~9% YoY in January (individual WRP), easing from elevated levels seen post GST exemption. Private players grew 7% YoY, while Life Insurance Corporation of India sustained stronger growth of ~15% YoY for the fourth consecutive month, indicating continued market share gains and steady underlying demand. The moderation appears cyclical rather than structural, with underlying premium demand intact and growth likely to vary across players based on distribution strength and product mix.</p>.<p><em>(The writer is Head of Research, Wealth Management, Motilal Oswal Financial Services Limited)</em></p>