The Indian stock market is on edge as investors eagerly await the opening on March 3, 2025, following substantial losses on February 28, when the BSE Sensex and NSE Nifty 50 indices faced their worst trading day of the year.
On February 28, the Sensex plummeted by 1.90 percent, closing at 73,198.10, and the Nifty 50 index dropped 1.86 percent, culminating at 22,124.70. These dramatic declines stirred uncertainty, pushing both indices to six percent down throughout February. Wider market segments suffered more, evident as the Nifty Midcap 150 nosedived 21.1 percent and Smallcap 250 plunged 25.6 percent from previous highs. Analysts now wonder: Will this downward streak continue on March 3?
Market analysts are dissecting several external and internal factors expected to shape trading trends. According to Ajit Mishra from Religare Broking, the decline is largely driven by profit booking, and he maintains, "Given these factors, we maintain our negative outlook on Nifty until clear signs of reversal emerge." Mishra's commentary highlights the cautious sentiment as traders remain on alert.
On the flip side, Kotak Securities’ Amol Athawale indicated there is potential for either continued declines or recovery. “We view the current market condition as weak but oversold, hence the strong possibility of a pullback rally from the current levels is not ruled out,” he stated on the challenging bearish market trend, which is grounded by technical indicators.
For traders focusing on short-term positions, the key levels to monitor are around 22,200 for the Nifty 50 and 73,500 for the Sensex. If these levels hold, there could be optimism for quick gains. Athawale cautioned, "Below this, the market could slip to 22,000-21,800 and 73,000-72,500, indicating significant downside potential if bearish sentiments persist.” The underlying technical formation reinforces the possibility of sustained downward motion, potentially testing the 21,000-21,200 range should market pressures continue unabated.
An alarming reality set forth was the January 2025 performance, where the Nifty 50 index exhibited significant volatility, which has been reflected broadly across sectors. The IT, Realty, and Energy sectors emerged as the worst-hit, showcasing greater vulnerability to market swings.
Investors are also paying close attention to economic data and high-frequency indicators from the previous days. Auto sales figures and PMI data are scheduled for release, both of which are anticipated to guide sentiment and market movement. Hence, traders remain glued to these releases, hoping for signs of recovery.
Meanwhile, Vaishali Parekh from Prabhudas Lilladher noted the necessity to reassess the market's support levels. She observed, "The Nifty 50 index crashed with heavy profit booking witnessed after the huge gap down opening below the 22500 zone and has decisively breached below the 22300 zone with a huge bearish candle on the daily chart.” Parekh also identified 21,200 as the next significant support level, cautioning of potential for significant declines if investor risk appetite continues to deteriorate.
While the immediate outlook appears grim, some analysts cling to the historical precedent indicating stock market resilience. Capitalmind Research's Krishna Appala argues, “Over the past 30 years, markets have fallen over 20 percent in multiple years, yet ended positive in 22 out of those 30 years.” This assertion brings some comfort amid the turbulence, averting panic and embracing calculated consistency instead.
There emerges insight and hope for recovery, though uncertainty and caution dominate immediate sentiment. Analysts project movement patterns remain influenced by broader geopolitical dynamics, including potential tariff developments abroad and fluctuations within Foreign Institutional Investor (FII) trends. With no notable domestic events on the immediate horizon, the market sentiment may float heavily based on global assessments.
Stock recommendations for the day suggest selective buying as the previous heavy selling volume might suggest oversold conditions suitable for bargains. Analysts recommend stocks such as Shriram Finance, NCC, and Protean eGov Technologies as potential buys based on their resilience and competitive positioning.
Regardless of the turmoil, one thing remains clear: investors need sleepless nights as they navigate this turbulent season filled with uncertainties. March's opening is awaited with bated breath, hoping history's optimism prevails as they remain alert to developments on the horizon.
Disclaimer: This article does not constitute investment advice. Readers are encouraged to consult financial advisors before making any trading decisions.