The Indian stock market continues to exhibit significant volatility, as recent days have seen key indices experience notable losses, affecting the valuations of the country’s leading firms. The BSE Sensex and NSE Nifty 50 have struggled this week amid persistent selling from foreign institutional investors (FIIs) and weakening global economic indicators.
On Tuesday, the stock market opened on a cautiously optimistic note, with the Sensex rising 192.68 points, or 0.26%, to reach 74,647.09, and the Nifty gaining 33.85 points, or 0.15%, to settle at 22,587.20 by 9:36 am. Despite this initial uptick, market analysts noted signs of underlying weakness, particularly within the Nifty Midcap and Smallcap indices, which both saw declines of 0.65% and 0.61%, respectively.
Vikram Kasat, the head of advisory at PL Capital, cautioned investors about the recent market trends, indicating the Nifty has breached its previous low and closed below the significant support line. “The lower end of the downward sloping channel is at 22,100. The 22,820 mark will be a pivotal resistance level and point of trend reversal,” said Kasat.
During this time, bolstered by gains from firms like Mahindra & Mahindra (M&M), Zomato, and Maruti Suzuki, the Sensex featured distinct winners. Conversely, stocks such as L&T, TCS, and UltraTech Cement were among the major laggards, pointing to divergence within the indices. The impact of the companies was amplified against the backdrop of a mixed global market; Wall Street displayed mixed results with the Dow Jones Industrial Average barely climbing 0.08%, whereas the S&P 500 and Nasdaq declined 0.50% and 1.21%, respectively.
Adding to the unease were foreign institutional investors, who continued to sell off equities, having dumped over ₹6,286.70 crore on February 24 alone. Conversely, domestic institutional investors (DIIs) provided some support by purchasing equities worth ₹5,185.65 crore during the same period.
Market observers are urging caution from traders, advising them to wait for more definitive price action before engaging with fresh positions. Hardik Matalia of Choice Broking emphasized the need for care: “Given the prevailing market dynamics, traders are advised to exercise caution and wait for confirmation of price action at key levels.”
The previous trading session highlighted the precarious nature of the market. The Nifty 50 ended down 1.06% at 22,553.35, illustrating the bearish sentiment, as the top ten most-valued firms collectively saw their market capitalization shrink by ₹1.31 lakh crore. Among these casualties, Tata Consultancy Services Ltd. (TCS) lost ₹41,608 crore, leading the decline, followed by Bharti Airtel Ltd. and Reliance Industries Ltd., which suffered drops of ₹22,356.1 crore and ₹17,795.1 crore, respectively.
This decline came as India's market indices extended losses for the fifth consecutive session, nearing their lowest points since June 2024. The Nifty fell as low as 22,518 during intraday trading.
Market sentiment has been leashed not only by domestic sell-off but also external economic pressures. The weakness of major US indices is reflective of broader concerns about slowing GDP growth and inflation, with the Dow Jones, Nasdaq, and S&P 500 each facing substantial declines on the prior Friday. Investors are now grappling with fears stemming from geopolitical instability as the conflict between Russia and Ukraine escalates, with Russia launching significant drone attacks on Ukraine, according to reports.
Dr. VK Vijayakumar, chief investment strategist at Geojit Financial Services, elaborated on the multifaceted headwinds facing the market: “The market grapples with relentless FII selling and global uncertainties stemming from trade policy tensions and the geopolitical climate.”
The rupee’s weakening is compounding investor apprehension, alongside lowered corporate earnings and rising trade deficits. Investors had to navigate these turbulent waters on the backdrop of diminishing dollar reserves as well.
Despite the overall bearish outlook, certain sectors managed to remain resilient during the trading battles. For example, the Fast Moving Consumer Goods (FMCG) and pharmaceutical sectors showed slight gains. Here, companies like Hindustan Unilever and ITC managed to pull off modest gains even as the broader indices suffered from slumps.
The Indian stock market’s current scenario is fraught with volatility and uncertainty. With expert insights and market trends continually converging, investors find themselves at the crossroads, needing to decide their next moves wisely as the unpredictable nature of both domestic and international indicators lingers.