India’s benchmark indices, Sensex and Nifty, closed flat on February 18 as investors remained cautious ahead of the FOMC minutes release on February 19. A hawkish Fed stance could dampen hopes for rate cuts in 2025, potentially accelerating foreign outflows from Indian markets.

Markets opened on a subdued note and remained under pressure throughout the session, weighed down by weak corporate earnings and persistent foreign selling. FMCG and auto stocks dragged the Nifty lower, while the broader market faced steeper losses—BSE Midcap fell nearly 1 percent, and BSE Smallcap tumbled almost 2 percent on valuation concerns.

At close, the Sensex was down 29 points or 0.04 percent at 75,967, and the Nifty was down 14 points or 0.06 percent at 22,945. About 993 shares advanced, 2,804 shares declined, and 101 shares were unchanged.

Meanwhile, foreign institutional investors (FIIs) continue to flee Indian markets, offloading Rs 33,121 crore in February alone.

The pain is most evident in the broader market—small-cap stocks have officially entered a bear market, while mid-caps are still down 18 percent from their peaks.

Bharat Electronics, Trent, IndusInd Bank, Tata Motors, and M&M led the losers on the Nifty 50, dropping 2-3 percent. In contrast, Tech Mahindra, Wipro, Apollo Hospitals, NTPC, and HDFC Bank emerged as the top gainers, rising 0.5-1.5 percent.

Seven of the 13 major sectoral indices closed in the red. The Nifty IT index emerged as the top performer, gaining almost a percent, fueled by Persistent Systems and Tech Mahindra.

Shares of Persistent Systems surged 3 percent, snapping a six-day losing streak, after JP Morgan gave it an ‘overweight’ rating, urging investors to “buy the dip.” The brokerage set a target price of ?7,200 per share, implying a 30 percent upside from the last closing price.

Meanwhile, Zen Technologies remained under intense selling pressure for a third straight session after reporting a sharp sequential decline in Q3 earnings. The stock plunged 10 percent, extending its three-day rout to 33 percent.

Godfrey Phillips shares surged 5 percent, marking their third consecutive session of gains. The sharp uptrend follows the company’s strong December quarter earnings, with net profit soaring 48.7 percent to Rs 315.9 crore, compared to Rs 212.4 crore in the same period last year.

On the bright side, geopolitical de-escalation between Russia and Ukraine, cooling oil prices, and the RBI's monetary policy stance could serve as tailwinds.