The Indian inventory market continued its downward trajectory for the fourth consecutive session on Friday, weighed down by weak international cues. Benchmark indices, Sensex and Nifty 50, declined over 0.5% on February 21, pushed by heavy promoting in auto, pharmaceutical, monetary, and FMCG shares.
The 30-share BSE Sensex fell by 560 factors to an intraday low of 75,175.97. The index has recorded losses in 12 out of the previous 13 periods, shedding over 3,400 factors, or greater than 4%, throughout this era.
Notably, the Sensex has declined 12.5% from its document excessive of 85,978.25, achieved on September 27, 2024, marking a cumulative drop of 10,802 factors. This decline has been attributed to persistent promoting by overseas institutional traders (FIIs) since October 2024, as they search alternatives in additional reasonably priced markets.
Moreover, international geopolitical uncertainties, indicators of slowing home financial progress, and weak company earnings have contributed to the market downturn.
The current threats of upper tariffs by US President Donald Trump on imports have additionally created volatility in international monetary markets.
Market Sentiment Amid Tariff Issues
“Within the context of Trump’s tariff threats the market is negatively responding to potential tariff targets like autos and prescribed drugs and in search of alternatives in home consumption performs which is not going to be impacted by tariff threats. That is more likely to be a short-term pattern since Trump’s technique is to threaten with tariffs after which negotiate for tariff discount on US exports. It would take time for this to play out,” mentioned Dr. V Ok Vijayakumar, Chief Funding Strategist, Geojit Monetary Providers.
He additional famous that larger tariffs on imports into the US is just not within the curiosity of the US since it is going to be inflationary, inviting hawkish feedback from the Fed, which, in flip, will influence the US inventory market. Trump is not going to like this consequence and, due to this fact, he’s utilizing the interim interval to barter with buying and selling companions.
Vijayakumar additionally expects the FII promoting in India to proceed, significantly within the context of renewed curiosity in Chinese language shares that are low-cost and are staging a sensible restoration.
“FII promoting will proceed to place stress on largecaps. This is a chance for long-term traders. Choose midcaps like within the defence sector which have corrected and are pretty valued now are more likely to witness shopping for since they don’t face the specter of FII promoting,” mentioned Vijayakumar.
Key Sensex Constituents Driving the Decline
A number of heavyweight shares have considerably contributed to the Sensex’s downturn in current months:
Tata Motors: Tata Motors share worth has been the worst performer amongst Sensex constituents, declining over 36% previously six months and buying and selling 43% under its 52-week excessive.
Asian Paints: Asian Paints inventory worth has dropped over 28% previously six months and is presently down greater than 34% from its 52-week excessive.
Adani Ports & SEZ: The Adani Group inventory has delivered unfavorable returns of over 25% in six months and is buying and selling 32% under its 52-week excessive.
IndusInd Financial institution: Shares of the personal lender have declined 24.55% in six months, down 34% from their 52-week excessive.
PowerGrid Company of India: The PSU inventory has fallen 21% over the past six months and is presently 29% under its 52-week excessive.
With ongoing FII outflows and international uncertainties, market members are carefully monitoring geopolitical developments and company earnings for additional cues.
Sensex Outlook
On Friday, the Sensex breached the important technical help degree of 75,500, with the subsequent main help now seen at 75,200.
“If the Sensex closes under the essential help degree of 75,200, it might open the draw back goal of 70,234, which was the low recorded on June 4, 2024—the day of the Lok Sabha election outcomes,” mentioned Anshul Jain, Head of Analysis at Lakshmishree Funding and Securities.
On the upside, Jain famous that the Sensex might face resistance at its 20-Day Shifting Common (DMA) of 76,600. A decisive shut above this degree might pave the best way for the subsequent upside goal on the 50-Day Shifting Common (DMA), positioned at 77,490.
Disclaimer: The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise traders to test with licensed specialists earlier than making any funding choices.
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