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The Indian stock market experienced a mixed trading session, with the Sensex and Nifty remaining largely flat despite sectoral divergences and persistent global uncertainties. At approximately 11:45 AM, the Sensex was marginally up by 174 points, representing a 0.2 percent increase, reaching 74,629. Concurrently, the Nifty edged up by 14 points, registering a slight gain to 22,567. This tepid performance occurred against a backdrop of renewed concerns regarding U.S. trade policies and continued foreign institutional investor (FII) selling pressure. President Donald Trump's reaffirmation of tariffs on Canada and Mexico, coupled with the announcement of fresh restrictions on Chinese investments in strategic sectors, injected caution into the global markets. The benchmarks have declined nearly 14 percent from record highs, showing a fifth consecutive month of losses. The market breadth was mixed, with a near-equal number of stocks advancing and declining on the National Stock Exchange (NSE). This suggests a lack of clear direction and potential underlying volatility. The telecom and auto sectors, considered heavyweight components of the indices, contributed positively, offsetting losses experienced in the IT and oil & gas sectors. This sectoral rotation highlights the shifting investment preferences and sensitivities to evolving economic conditions. The underperformance of broader market indices, such as the BSE Midcap and Smallcap, suggests that the gains were concentrated in specific large-cap stocks, while smaller and medium-sized companies faced downward pressure. Among the sectoral indices, Nifty Metal and Nifty Realty were the worst performers, each experiencing declines exceeding 1 percent. The IT index also experienced a decline, extending losses from the previous session. Concerns about slowing U.S. growth and its impact on Indian IT firms, which derive a significant portion of their revenue from the U.S. market, weighed on sentiment. The decline in U.S. consumer sentiment and rising inflation expectations added to the negative outlook for the sector. A notable overnight decline in the tech-heavy Nasdaq Composite further exacerbated the pressure on the IT index. Investors grew cautious about demand for AI-driven technology in anticipation of earnings reports from market heavyweight Nvidia. Leading gainers on the Nifty included Bajaj Finserv, Nestle, Bajaj Finance, Bharti Airtel, and M&M, which saw increases ranging from 1 to 3 percent. Conversely, Wipro, Coal India, SBI Life, Dr. Reddy’s, and Hindalco were among the biggest losers, experiencing declines of 1 to 4 percent. The approval of Tata Capital’s initial public offering (IPO) led to a surge in Tata Investment shares, while Citi’s upbeat broking revenue projection for 360 ONE WAM, following its acquisition of Batlivala & Karani Securities, resulted in gains for the latter. The overall market sentiment remained cautious due to the prevailing global uncertainties, particularly related to trade policies and geopolitical risks. These factors, combined with the persistent FII selling pressure, have contributed to the subdued market performance.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the market dynamics, highlighting the oversold conditions and fair valuations in large-cap stocks. He noted the prevalence of short positions in the market but emphasized the persistent challenge posed by relentless FII selling in the cash market. Vijayakumar suggested that FIIs may continue their selling and shorting activities in the derivatives market as long as it remains profitable, leveraging the negative momentum in the market. The sustained buying by domestic institutional investors (DIIs) has been crucial in preventing a deeper market capitulation. The divergence between FII and DII investment patterns underscores the opposing forces at play in the Indian stock market. FIIs have been offloading Indian equities, while DIIs have been absorbing the selling pressure, providing a cushion against a significant market downturn. Data indicates that FIIs have offloaded Indian equities worth Rs 43,263 crore so far in February, while DIIs have purchased shares worth Rs 47,787 crore. This significant level of DII buying is a testament to the confidence of domestic investors in the long-term prospects of the Indian economy and the stock market. Vijayakumar also emphasized the importance of resolving Trump tariff uncertainty and seeing indications of growth and earnings recovery in India to improve market sentiment. These factors are crucial for attracting foreign investment and sustaining a positive market trajectory. The market's reaction to these events will determine its direction in the near term.
From a technical analysis perspective, Sameet Chavan, Head of Research (Technical and Derivatives) at Angel One, identified the support level at 22500-22400 as critical for the Nifty50 index. He suggested that the ability of this level to hold will determine whether a rebound is possible or if further declines are on the horizon. Chavan also pointed out the presence of a bearish gap at 22670-22720, which is expected to act as a significant resistance point and limit the index's ability to regain its momentum. Technical analysts use support and resistance levels to identify potential turning points in the market. A support level is a price level at which a stock or index is expected to stop falling, while a resistance level is a price level at which it is expected to stop rising. Bearish gaps are formed when the price of a stock or index opens significantly lower than its previous close, indicating strong selling pressure. The disclaimer provided emphasizes that the views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. It advises users to consult with certified experts before making any investment decisions. This disclaimer highlights the importance of conducting thorough research and seeking professional advice before investing in the stock market, as investment decisions can be complex and involve inherent risks. The information provided in the article is for informational purposes only and should not be considered as investment advice. Investors should carefully consider their investment objectives, risk tolerance, and financial situation before making any investment decisions.
Source: Sensex rises 170 points, Nifty flat as telecom, auto stocks offset losses in IT