Market Breadth Improves In February As Advance-Decline Ratio Crosses 1

Indian equities saw an improvement in market breadth in February. This, even as benchmark indices moved in a narrow range and volatility persisted. The average advance-decline ratio of stocks listed on the BSE was 1.03 in February.

This marks the first time in several months that the ratio moved above 1. The advance-decline ratio shows the number of stocks rising against those falling. A reading above 1 reflects more stocks advancing than those that declined.

Ratio Below 1 In The Previous Three Months

In the previous three months, the ratio was below 1. It was:

• 0.85 in January 2026

• 0.97 in December 2025

• 0.89 in November 2025

Benchmarks Stay Flat, Broader Markets Gain

Despite the improvement in breadth, the BSE Sensex and the Nifty 50 remained mostly flat. However, the broader market outperformed. The BSE MidCap 150 Index has risen 2.5%, while the BSE SmallCap 250 Index gained 1.5%.

This divergence shows that gains were more visible outside the large-cap space. Mid- and small-cap stocks saw selective buying, even as heavyweights in key sectors capped the upside in the benchmarks.

Sectoral Move Remains Uneven

Sector performance was mixed. Note that in February the:

• BSE IT Index fell 20%, making it one of the worst-performing segments

• Nifty Metal Index advanced 5.3%

Financials and property stocks also posted gains. The Nifty Bank Index rose 2.7%, while the Nifty Realty Index climbed 2%. The Nifty Defence Index added 0.4%.

Also Read - Graphite India Stock Jumps to 4-Year High in February

Signal For Investors

The rise shows that investors rotated into select segments. This, despite weakness in IT and the absence of clear direction in large-cap benchmarks. For investors, it signals that market participation has widened beyond a handful of heavyweights.

Source

Moneycontrol