The Indian equity landscape is witnessing a sharp divergence between traditional tech services and the banking sector. While global anxieties regarding artificial intelligence (AI) and trade tariffs have battered tech stocks, the banking space remains a primary focus for long-term growth, despite recent localized volatility. IT Sector: Assessing the Oversold Territory Market sentiment toward the IT sector has reached a multi-month low. The Nifty IT index has plummeted nearly **21%** over the past month as of late February 2026. This correction is fueled by fears that AI-led automation is rapidly disrupting legacy programming and maintenance roles. Despite the negative headlines, valuations for major tech players have become increasingly attractive. Analysts suggest the current "panic selling" may be overstating the speed of disruption, creating a window for investors to accumulate high-quality tech assets at a significant discount. Banking: A Tale of Two Tiers The banking sector is currently split between high-performing heavyweights and mid-tier lenders facing regulatory and internal hurdles. State Bank of India (SBI) recently made history by becoming India's second-largest bank by market capitalization, overtaking ICICI Bank after a **7%** surge in its share price to an all-time high of **₹1,136.85**. While ICICI and HDFC Bank remain fundamental favorites with strong credit expansion outlooks, mid-tier lenders are under intense pressure. IDFC First Bank and AU Small Finance Bank have seen a combined erosion of over **₹16,000 crore** in market value this week. This follows a **₹590 crore** fraud disclosure at an IDFC First branch, leading to the Haryana government de-empanelling both lenders. IDFC First shares hit a **20%** lower circuit, while AU Small Finance dropped over **7%**. Experts advise a "wait-and-watch" approach for these specific names until forensic audits are complete. Tobacco: Navigating the Tax Shock Cigarette stocks are navigating a volatile transition following the implementation of a new excise duty regime on February 1, 2026. The new structure introduced specific duties ranging from **₹2,050 to ₹8,500** per 1,000 sticks, alongside a **40%** GST rate. Initial market reaction was negative, with stocks like ITC and Godfrey Phillips seeing sharp declines. However, companies have demonstrated significant pricing power. ITC recently implemented price hikes of up to **41%** on premium brands like Gold Flake to protect margins. While this offsets tax costs, the risk of "downtrading" to cheaper alternatives or illicit products remains a primary concern for the sector. Strategic Outlook The broader market is currently range-bound, with Nifty support identified near the **25,000** level. Investors are shifting focus toward large-cap private banks and resilient PSU lenders as a hedge against global tech volatility. The resilience of the "Big Three"—SBI, HDFC, and ICICI—continues to underpin the financial sector, even as global headwinds from U.S. tariff uncertainties and geopolitical tensions keep the overall market atmosphere cautious.