The Indian stock market has continued its downward trend, marking its fifth consecutive day of decline. The BSE Sensex plummeted by 1,018.20 points, or 1.32 percent, closing at 76,293.60. This drop signifies increased investor anxiety and reflects broader economic uncertainties affecting the market.
On February 11, 2025, both the BSE Sensex and the NSE Nifty50 recorded substantial losses. The Nifty50 ended the day at 23,071.80, also down by 1.32 percent, following a day marked by heavy selling across various sectors.
Investors have been on edge due to the anticipated impact of US President Donald Trump’s tariff policies, which have contributed to bearish sentiments globally. Trump's recent decision to impose a 25 percent tariff on steel and aluminum imports has raised concerns about potential repercussions for Indian export companies and the broader economy.
The Sensex's recent performance highlights the market's struggles; it has dropped 2,290 points over the last five trading sessions alone. During this span, the index traded between 77,387.28 and 76,030.59, indicating significant volatility.
Leading this market downturn was selling pressure from foreign institutional investors (FIIs), who have been withdrawing investments aggressively. According to reports, FIIs sold nearly Rs 12,643 crore worth of equity shares during February 2025. This trend has persisted since last October, culminating to over Rs 2.75 lakh crore of outflows since then. Analysts warn this may continue to exert significant pressure on the stock market.
Further complicatings matters are rising US bond yields, which make American assets increasingly attractive to global investors. The yield on the 10-year Treasury note, which recently surpassed 4.49 percent, coupled with a strengthening dollar, has resulted in additional capital outflows from the Indian market, as investors seek higher returns abroad.
On February 11, market analysts observed widespread bearish trends across all sectors on the National Stock Exchange (NSE). Notably, the Nifty Smallcap100 and Nifty Midcap100 indices shed 3.45 percent and 3.02 percent, respectively. Even major sectors, such as healthcare, banking, and automobiles, recorded dipped performance; the Nifty PSU Bank and Auto comprised among the biggest losers, with declines reaching as high as 3.28 percent.
Investors reacted to this environment by focusing on key market indicators. Technical analysis indicated persistent selling pressure as the Nifty 50 traded below key resistance levels. Experts cited the necessity for the index to rally above the 23,450 mark to signal potential bullish sentiment and counteract the current selling trend.
Market experts, including Vinod Nair, Head of Research at Geojit Financial Services, stressed the importance of upcoming data releases, such as projected US inflation rates, which could influence market trends. Another factor to watch will be Prime Minister Modi’s forthcoming visit to the US, which may generate discussions around trade policies and relief from current uncertainties.
The overall sentiment across Dalal Street has markedly shifted due to these compounding factors. Amidst the pressure, stocks like Eicher Motors, Apollo Hospitals, and Coal India have faced notable drops, with Eicher Motors and Apollo Hospitals both slipping due to disappointing quarterly earnings reports. Conversely, stocks such as Adani Enterprises and Trent managed to record minor gains.
With the market displaying such signs of instability, analysts have urged investors to adopt cautious strategies. While some suggest this downturn could present buying opportunities for large-cap stocks due to their currently fair valuations, they warn against the allure of smaller-cap stocks, which often possess higher risk profiles.
Looking forward, the market's volatility is expected to continue as investors digest the potential impacts of US tariffs and await new economic data. Making informed decisions will be key amid heightened uncertainty and fluctuatory conditions present on Dalal Street.