Stocks are rising again, but volatility remains – key factors that could impact next week’s trend.

Following a sharp decline in the stock market that caused major indices to plummet over 1 percent, Indian equities saw a modest recovery on February 20, providing some relief to investors. Despite the bounce back, volatility remained a lingering concern. The Sensex, a 30-share index, rose by 317 points or 0.38 percent, closing at 82,814.71, while the Nifty 50 gained 117 points or 0.46 percent to reach 25,571.25. In contrast, broader indices displayed mixed results, with the BSE 150 MidCap Index advancing 0.44 percent and the BSE 250 SmallCap Index slipping 0.19 percent, indicative of selective participation across various segments.

Market experts attributed the rebound to value buying in quality stocks that had recently experienced corrections. “Markets ended the week with modest gains, supported by value buying in fundamentally strong stocks that had recently corrected, despite mixed global cues. Sentiment remained positive during the first three sessions; however, heightened volatility in the final sessions turned participants cautious. Ultimately, the benchmark indices Nifty and Sensex settled at 25,571.25 and 61,172, respectively,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

Looking ahead, investors are likely to monitor external developments closely as they are expected to impact market sentiment significantly. Vinod Nair, Head of Research, Geojit Investments Limited, highlighted that traders will be keeping a close watch on updates related to Trump’s global tariffs announcement, geopolitical tensions involving the US and Iran, fluctuations in crude oil prices, and broader monetary policy signals across the globe. Despite anticipated volatility, strong domestic macro fundamentals and a supportive demand environment are projected to offer stability. The forthcoming release of India’s GDP data, slated for February 27 by the Ministry of Statistics & Programme Implementation, is expected to provide fresh clues for market movements in the future.

Key triggers that are likely to influence markets in the upcoming week include the Supreme Court of the United States’ ruling on tariffs, a recent executive order issued by the US President affecting trade dynamics and tariff structures, and the potential impact on global risk sentiment. Furthermore, the status of an interim trade agreement between India and the US is a focal point of interest. Additionally, factors such as India’s GDP data, F&O expiry, gold and silver prices, as well as the flows of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) will be closely monitored.

While global cues continue to play a pivotal role in shaping market trends, domestic investors have displayed resilience amid the prevailing uncertainty. As markets move forward, traders can expect to see a range-bound trading environment influenced by liquidity flows and international developments. Despite fluctuations, the current structural positioning indicates a controlled consolidation phase in the commodity complex, emphasizing repositioning strategies over aggressive liquidation practices. Lastly, the upward momentum in corporate earnings is predicted to attract more FPIs, with the optimistic outlook for FY27 earnings growth likely to enhance India’s valuation attractiveness.