India’s headline indices – Sensex and Nifty – fell to an eight-month low on February 24. The indices have fallen over 13 and 14 per cent respectively from their all-time highs
Caught in the Monday blues, both the Sensex and Nifty gave a gap-down opening on February 24, slipping into the red for the fifth consecutive session. The BSE Sensex crashed 856.65 points, or 1.14 per cent, to close at 74,454.41, while the Nifty 50 declined by 242.55 points, or 1.06 per cent, to end the session at 22,553.35.
During the session, Sensex tumbled 923.62 points to hit an intraday low of 74,387.44 and Nifty 50 fell 277.10 points to touch a low of 22,518.80.
The top losers in Nifty 50 were Wipro, HCL Technologies, Infosys, TCS, Tata Steel, while gainers included M&M, Eicher Motors, Dr Reddy's Labs, Hero MotoCorp and Kotak Mahindra Bank.
Except auto, pharma and FMCG, all other sectoral indices settled in the red, with IT and metal indices down more than 2 per cent each.
As many as 283 BSE-listed stocks touched their 52-week lows. The combined market cap of all the BSE-listed companies declined by 4.98 lakh crore to 397.98 lakh crore.
India's equity markets have been under pressure for nearly five months now amid unabated selling by foreign institutional investors (FIIs). Nifty has cascaded over 14 per cent from its all-time high registered in late September 2024. Sensex also gave up the 75,000 mark for the first time in eight months.
Here’s Why The Stock Market Is Falling
According to VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, the market is facing headwinds from relentless FII selling and global uncertainties relating to Trump tariffs. “The sharp surge in Chinese stocks is another near-term headwind. The ‘Sell India, Buy China’ trade may continue for some time since Chinese stocks continue to be attractive,” he said.
Investors are also wary of a slowing US economy, with Federal Reserve officials indicating they are unlikely to reduce interest rates until inflation returns to the 2 per cent target.
“In the US, long-term inflation expectations are rising and, therefore, the expected rate cut by the Fed is unlikely to materialise. The Fed might even turn hawkish, impacting US stock markets,” Vijayakumar said.
“If this happens and the US bond yields start declining, FIIs may cease to be sellers in India and may even resume be buying. The near-term scenario is highly uncertain, he adds.
Investors are also cautious ahead of the release of the Federal Reserve’s preferred core inflation measure this Friday.
Stock markets in India as well as globally also took a hit after a surprising drop-in US services activity, fueled by worries over tariffs and rising costs. There were also reports that the White House was urging Mexico to impose tariffs on Chinese imports.
In the US, consumer sentiment saw a steep fall in February, hitting a 15-month low as inflation expectations climbed. The University of Michigan’s Consumer Sentiment Index fell to 64.7 from January’s 71.7, falling short of economists' forecasts. Many households voiced concerns that President Trump’s tariff plans could undermine their purchasing power.
Nifty Outlook
Rupak De, Senior Technical Analyst at LKP Securities, said, "The Nifty has broken down from a bearish flag and pole pattern, signaling the start of a correction. From here, the index may continue to decline in the short term, moving toward lower levels."
Talking about levels, De said, "Immediate support is seen at 22,450, and a drop below this level could trigger a further correction toward 22,200 or lower. On the upside, immediate resistance is observed in the 22,670-22,700 range."
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said, "A reasonable negative candle was formed on the daily chart with gap down opening and with minor upper shadow. Technically this market action signals a downside breakout of the support as well as the short-term range movement at 22700 levels. This is not a good sign."
Shetti added, "The underlying trend of Nifty continues to be negative. There is a possibility of more weakness down to the next support of 22400 levels (20- month EMA) in the short term. Immediate resistance is placed at 22750 levels."