Indian equity markets staged a notable recovery on Monday, 16 February 2026, with benchmark indices Sensex and Nifty rebounding nearly 1 per cent after a recent phase of losses. A renewed buying interest in banking and power stocks, combined with supportive global cues and improved investor sentiment, helped the markets snap a three-day decline and deliver some much-needed relief to traders and long-term investors.

 

Author : Aashiya Jain | EQmint | Market News

After a few sessions of subdued performance Dalal Street showed renewed vigour on Monday with both the BSE Sensex and NSE Nifty marking strong gains. The Sensex climbed approximately 650 points up 0.79 per cent to settle around 83 277 while the Nifty gained about 0.83 per cent reaching 25,682 by the close of trade.

 

This comeback was underpinned by targeted buying in select sectors that had been under pressure during the preceding downturn. Most notably power and banking stocks emerged as key drivers of the rally attracting fresh interest from traders and institutional investors.

 

Power and Financial Stocks Lead the Charge Among

PowerGrid led the gains within the Sensex pack surging more than 4 per cent reflecting optimism about sustained demand in the energy segment. Other heavyweights that swung firmly into positive territory included major banks and financial institutions such as HDFC Bank Axis Bank Kotak Mahindra Bank State Bank of India SBI and non-bank financial firms like Bajaj Finserv Several industrial and diversified stocks also contributed to the uptrend .

 

The banking sector’s bounce is widely seen as a response to improving loan growth metrics and stabilising asset quality offering reassurance about the financial health of lenders despite broader economic volatility. Analysts suggested that this renewed confidence among investors was central to the market’s reversal.

 

Broader Market Dynamics and Supporting Factors

Market experts observed that the rebound was not limited to domestic sentiment but also influenced by developments in global markets. A decline in long-term US Treasury yields underpinned by softer inflation data bolstered expectations of potential Federal Reserve rate cuts later in the year which in turn encouraged risk-taking in equity markets.

Additionally stability in the rupee’s value and range-bound crude oil prices added to the positive tone providing comfort to equity investors navigating uncertain macroeconomic conditions.

While the rally was broad not every segment participated equally. Some technology stocks and sectors exposed to global demand fluctuations saw mixed trading highlighting that investor optimism remains measured and selective.

 

Investor Activity and Market Sentiment

Data from exchange filings showed that while foreign institutional investors FIIs continued to remain cautious registering net outflows in recent sessions domestic institutional investors DIIs stepped in with fresh purchases helping stabilise the market and underpin the rally.

This interplay between foreign caution and domestic conviction is increasingly shaping market behaviour. The latest session’s bounce came after last week’s sharp declines where the Sensex and Nifty had moved lower on broader profit-taking and caution ahead of global central bank meetings.

Monday’s rebound therefore offered relief to investors who had been waiting for a recovery signal.

 

What Lies Ahead

Going forward investors will be closely watching a combination of domestic cues such as corporate earnings credit growth trends and policy announcements as well as global developments particularly US Federal Reserve communications and international economic data.

For now Monday’s rally has provided a reset of sorts on Dalal Street showing that while markets may experience bouts of volatility underlying structural support, especially in banking and power sectors, can fuel meaningful rebounds when sentiment improves.

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Resource Link : TheHindu