Market Brief: Indian Equities Reset Indian equities are navigating a decisive transition following a rigorous **1.5-year consolidation** phase. Recent price action suggests the bulk of the market correction is now complete, with the Nifty 50 stabilizing around the **25,700** level and the BSE Sensex holding firm near **83,300**. Compressed valuations and targeted policy interventions are driving this recovery. The market has effectively absorbed the impact of a **15%** correction in the Nifty 500 from previous peaks. Current sentiment is bolstered by a resilient GDP growth projection of **7.4%** for FY26 and a multi-decade low in gross non-performing assets at **2.2%**. Sector Performance and Leadership The current market phase is characterized by a rotation toward domestic-economy-linked sectors. High-frequency indicators show a clear shift in leadership: **Public Sector Banks (PSBs)** State-run lenders have emerged as top performers, with the PSU Bank index gaining **12%** since the start of 2026. Heavyweights like State Bank of India are reporting record quarterly profits exceeding **21,000 crore**, supported by robust credit demand and improved asset quality. **Metals and Mining** The metal sector is rebounding on the back of resilient global pricing and domestic infrastructure demand. Primary steel producers recorded a **9%** year-on-year increase in sales volumes, reaching **21 million tonnes**. Large-scale capacity expansions and anti-dumping duties on steel imports are providing significant margin tailwinds. **Financials and Capital Markets** The financial services sector saw a sharp turnaround in February, attracting over **6,000 crore** in fresh inflows. Regional private banks and capital market players are benefiting from improving earnings breadth and a revival in retail participation. Capital Flows and Economic Anchors Foreign Portfolio Investors (FPIs) have transitioned to net buyers in February 2026, infusing more than **33,000 crore** into the market. This marks a significant reversal from the massive **1.66 lakh crore** outflow recorded in 2025. Stability is further supported by India's record forex reserves, which have climbed to **$725.7 billion**. Inflation remains managed within a comfortable range, with the headline rate recorded at **2.75%** in early 2026. Manufacturing activity remains a primary growth driver, expanding by **8.1%** as per recent industrial production data. This industrial momentum, combined with a **3.9%** government capital expenditure-to-GDP ratio, provides a solid floor for the next leg of the market cycle.