Despite flat index performance, more stocks declined (1672) than advanced (1494), indicating weak internal market strength. This suggests the market move was concentrated in a few heavyweight stocks.
What happened: Jefferies, a leading global investment bank, issued a sweeping note titled "P-AI-N Not Over Yet" downgrading six major Indian IT stocks simultaneously.[2]
This research is for information and education only and is not investment advice. Figures may be provisional. Oorjita.AI and its authors may hold positions in securities mentioned. Please consult a SEBI-registered investment adviser before making investment decisions. Published Monday, 23 February 2026, 7:47 PM IST.
On February 25, the US Department of Commerce announced preliminary countervailing duties (CVD) of approximately 126% on Indian solar module imports.
1 advancing sector vs. 8 declining sectors Market Breadth: Negative (11% advance rate) Interpretation: Risk-off week; only financials held ground
Wall Street's tech rout extended Thursday as AI-related concerns and profit-booking sent the Nasdaq Composite tumbling over 2%, its worst single-day drop in weeks.
Don't panic-sell on day 1: Major downgrades often cause an initial spike down followed by stabilisation as value buyers step in.
Check consensus vs. new target: If Jefferies' new target of ₹1,290 for Infosys is still above the current price of ₹1,353, the stock may already be pricing in the bad news.
Understand what's already priced in: Jefferies notes that despite a 16% fall YTD, IT stocks still offer "higher downside than upside" — this means the sell-off may not be over.
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Indian equity markets closed in positive territory on 23-Feb-2026, with benchmark indices gaining ground despite mixed breadth. The Nifty 50 closed at 25,571.25 (+0.55%), while Bank Nifty settled at 61,172.00 (+0.15%). The session was marked by selective buying in banking, FMCG, and PSU Bank stocks, while IT stocks extended losses for the fourth consecutive session.
| Index | Close | % Change |
|---|---|---|
| Nifty 50 | 25,571.25 | +0.55% |
| Bank Nifty | 61,172.00 | +0.15% |
Advance-Decline Analysis:
Market Breadth Concern: Despite flat index performance, more stocks declined (1672) than advanced (1494), indicating weak internal market strength. This suggests the market move was concentrated in a few heavyweight stocks.
Interpretation: The High/Low ratio of 0.46 indicates that 169 stocks hit new lows versus 78 hitting new highs, suggesting cautious sentiment with more stocks under pressure at the broader market level.
Put-Call Ratio (PCR): 0.972 Interpretation: The PCR of 0.972 indicates balanced market sentiment. A PCR around 1.0 suggests relatively balanced positioning between bullish and bearish traders.
Key Strikes (Max Open Interest):
Trading Range: Current options data suggests Nifty is likely to trade in the 25,500-26,000 range in the near term, with significant OI concentration at these strikes.
Put-Call Ratio (PCR): 0.927
Interpretation: Neutral sentiment
Key Strikes:
Wipro extended losses amid IT sector downgrades and AI disruption concerns.
Standout Stocks:
Worst Performers:
Top Gainers:
Top Loser:
Top Gainers:
Top Loser:
Best Performer:
Top Losers:
Top Gainers:
Top Loser:
Top Gainers:
Top Loser:
Foreign Institutional Investors (FII) - Equity: ₹3,483.70 crore (Net Buying) [Provisional]
Domestic Institutional Investors (DII): ₹-1,292.24 crore (Net Selling) [Provisional]
Net Combined Flow: ₹2,191.46 crore (Net Inflow)
Interpretation: FIIs returned as net buyers with ₹3,483.70 crore inflow, signaling improving risk appetite and positive sentiment toward Indian equities. This marks a constructive shift after cautious positioning in recent sessions. However, DIIs were net sellers of ₹1,292.24 crore, likely booking profits at current levels. The net combined inflow of ₹2,191.46 crore remains supportive for markets.
Key Takeaway: FII buying typically drives near-term momentum, especially when sustained over multiple sessions. The positive FII stance suggests global investors remain constructive on India despite broader market concerns.
*Note: FII/DII data is provisional and subject to final reconciliation on T+1 basis.*
INR/USD Exchange Rate: ₹90.27 (as of December 3, 2025) [Official - FBIL/RBI Reference Rate]
*Note: Latest February 2026 RBI reference rate pending publication. Rate shown is most recent available official FBIL/RBI reference.*
Macro Context:
Global Cues to Watch:
Nifty 50 Technical Setup:
Trading Strategy: Nifty is likely to remain range-bound between 25,500 and 26,000 in the near term. A decisive break above 26,000 could trigger momentum toward 26,200-26,500, while a breakdown below 25,500 may lead to a test of 25,200-25,000 levels.
Bank Nifty Technical Setup:
Key Observations:
Actionable Levels:
The ongoing sell-off in IT stocks extends beyond typical profit-booking. Jefferies' downgrades of six major IT companies highlight concerns about AI-led business model disruption. Traditional managed services revenue is expected to shrink, forcing a shift toward consulting and implementation—a transition that may compress margins and require significant capability building.
IDFC First Bank's 16% crash following the ₹590 crore fraud disclosure at its Chandigarh branch serves as a reminder of operational risk in the banking sector. Despite this, broader banking indices held up well, with PSU banks gaining 1.36%, indicating isolated impact rather than systemic concern.
While benchmark indices remained flat, the A/D ratio of 0.89 reveals underlying weakness. Only 1,494 stocks advanced versus 1,672 declines, suggesting market gains were driven by select large-cap stocks (Adani Ports, Kotak Bank). This concentration risk could lead to sharper corrections if heavyweight stocks falter.
Both Nifty and Bank Nifty PCR ratios near 0.97 and 0.93 respectively indicate balanced options positioning. This suggests neither bulls nor bears have strong conviction, likely keeping markets range-bound ahead of F&O expiry.
FII inflows of ₹3,484 crore mark a constructive return after weeks of caution. However, DII selling of ₹1,292 crore indicates domestic institutions are using foreign buying to book profits. This dynamic often precedes short-term consolidation before the next directional move.
A broker downgrade is when a research analyst at an investment bank or brokerage firm lowers their investment rating on a stock. The most common rating ladder is Buy → Hold → Underperform (Sell). When a well-respected global brokerage like Jefferies downgrades a stock, institutional investors — who manage billions in assets — are obligated to review and often reduce their positions, triggering significant selling.[1]
A price target is the analyst's 12-month forecast of where a stock's price should be. When they cut the target, they're saying: "This stock is worth less than we previously thought." Today, Jefferies slashed targets by up to 33% across six Indian IT companies.[1]
What happened: Jefferies, a leading global investment bank, issued a sweeping note titled "P-AI-N Not Over Yet" downgrading six major Indian IT stocks simultaneously.[2]
| Stock | Old Rating | New Rating | Old Target (₹) | New Target (₹) | Cut % |
|---|---|---|---|---|---|
| Infosys | Buy | Hold | 1,880 | 1,290 | -31% |
| HCL Tech Buy Hold 1,885 1,390 -26% | |||||
| Mphasis | Buy | Hold | 3,410 | 2,450 | -28% |
| LTIMindtree Hold Underperform 6,175 4,300 -30% |
| TCS | Hold | Underperform | 3,485 | 2,350 | -33% |
|---|---|---|---|---|---|
| Hexaware Hold Underperform 660 460 -30% |
Source: Jefferies Research Note, 23-Feb-2026
Jefferies argued that AI will structurally change the IT business mix — shifting work toward consulting and implementation, while shrinking the highly-profitable managed services segment (which accounts for 22–45% of large IT revenues). This means:[3]
| Stock | Price (₹) | Day's Change |
|---|---|---|
| Infosys (INFY) | 1,353.20 | -1.86% |
| Wipro 209.86 -1.89% | ||
| Coforge | 1,340.60 | -3.85% |
| TCS 2,686.20 -0.45% | ||
| Nifty IT Index | — | -1.42% |
Nifty IT has now fallen 14% in 2026 YTD, underperforming Nifty 50 by 12 percentage points.
"A downgrade from a tier-1 global brokerage is not just a price target change — it's a signal that the fundamental investment thesis for that company or sector has changed. Today's Jefferies note suggests the market may be re-pricing Indian IT for a structurally lower-growth, lower-margin era driven by AI disruption."
Disclaimer: Analyst targets are forward-looking estimates and not guarantees. Always cross-verify with multiple analysts before making investment decisions.
Key Events to Watch:
Expected Market Behavior: Markets are likely to remain volatile on F&O expiry day. Range-bound trading between 25,500-25,900 for Nifty is anticipated. Bank Nifty may show relative strength supported by PSU bank momentum.
Sector Focus:
Trading Strategy for Tomorrow:
Risk Factors:
Next Edition: Market Prabhat – Morning Newsletter for 10 February 2026
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