The Indian stock market opened in the red on Wednesday, February 12, 2025, as investor sentiment remained fragile following a severe crash in the previous trading session. The benchmark indices, Sensex and Nifty 50, extended their losses, dragged down by mid and small-cap stocks in sectors like healthcare, real estate, and consumer durables. The market’s downward spiral was further exacerbated by global trade war fears, a weakening rupee, and disappointing third-quarter financial results from Indian companies.
Market Performance at Open
At 9:20 AM, the BSE Sensex was down by 155.24 points, or 0.20%, settling at 76,138.36. Similarly, the NSE Nifty opened 37.85 points lower, marking a 0.16% decline, and stood at 23,033.95. The broader market indices also reflected the bearish trend, with mid and small-cap stocks underperforming significantly.
The market’s poor performance comes on the heels of a sharp sell-off in the previous session, where the Sensex had plummeted by 1,018.20 points (1.32%) and the Nifty by 309.80 points (1.32%). This marked the fifth consecutive session of losses for the Nifty, a trend not seen since December 2024. Analysts attributed the sustained decline to a combination of domestic and global factors, including weak corporate earnings, rising bond yields, and fears of an escalating trade war.
Global Factors: Trade War Fears Loom Large
One of the primary drivers of the market’s downturn was the announcement by US President Donald Trump to impose a 25% tariff on all steel and aluminum imports. This move has reignited fears of a global trade war, causing investors to adopt a risk-off approach. The tariffs are expected to disrupt global supply chains and increase input costs for industries reliant on these metals, further stoking inflationary pressures.
The ripple effects of this decision were felt across global markets, with Indian equities being no exception. The uncertainty surrounding trade policies has led to heightened volatility, as investors grapple with the potential impact on corporate profitability and economic growth. The Indian rupee also felt the heat, depreciating to 86.5175 against the US dollar, marking a 0.36% decline.
Sectoral Performance: Healthcare, Real Estate, and Consumer Durables Take a Hit
The Nifty sectoral indices painted a grim picture, with healthcare, real estate, and consumer durables emerging as the worst-performing sectors. The Nifty Midsmall Healthcare Index led the losses, falling by 1.12% to 38,935.60. Key contributors to this decline included Poly Medicure Ltd (down 2.76%), Suven Pharmaceuticals Ltd (down 2.26%), and JB Chemicals & Pharmaceuticals Ltd (down 2.23%).
The real estate sector also faced significant headwinds, with the Nifty Realty Index dropping by 1.04% to 854.05. Major players like Prestige Estates Projects Ltd (down 1.91%), Oberoi Realty Ltd (down 1.56%), and DLF Ltd (down 1.33%) were among the top losers. The consumer durables sector followed suit, with the Nifty Consumer Durables Index declining by 0.89% to 36,388.25. Stocks like Amber Enterprises India Ltd (down 3.01%), V-Guard Industries Ltd (down 2.35%), and Kalyan Jewellers India Ltd (down 1.70%) dragged the index lower.
Top Losers: Mahindra & Mahindra, ITC, and Zomato
Among the 30 Sensex stocks, 14 were trading in the red, with Mahindra & Mahindra Ltd leading the losses. The automaker’s stock fell by 2.23% to ₹3,015.85, reflecting concerns over rising input costs and sluggish demand. ITC Ltd, a heavyweight in the FMCG sector, was not far behind, declining by 1.77% to ₹411.05. The company’s performance has been under pressure due to weak consumer sentiment and increased competition.
Zomato Ltd, a prominent player in the food delivery space, also saw its stock tumble by 1.51% to ₹212.00. The company has been grappling with challenges such as rising operational costs and intensifying competition, which have weighed heavily on investor sentiment.
Rupee and Bond Market: A Mixed Bag
While the equity markets were in turmoil, the currency and bond markets presented a mixed picture. The Indian rupee depreciated to 86.5175 against the US dollar, marking a 0.36% decline. This depreciation was driven by a combination of global trade war fears and a strengthening dollar. However, the 10-year government bond yield showed some resilience, rising marginally to ₹100.64, an increase of ₹0.05 or 0.05%.
Previous Session Recap: A Bloodbath in Financial Services and Healthcare
The previous trading session on Tuesday, February 11, 2025, had set the stage for Wednesday’s downturn. The Sensex had closed 1,018.20 points lower, while the Nifty had shed 309.80 points. The financial services and healthcare sectors bore the brunt of the sell-off, with the Nifty Midsmall Financial Services Index plunging by 3.76% and the Nifty Midsmall Healthcare Index dropping by 3.28%.
Bajaj Finserv Ltd emerged as the top loser among Sensex stocks, falling by 2.70% to ₹1,744.50. Tata Steel Ltd and Zomato Ltd also witnessed significant declines, dropping by 2.91% and 5.24%, respectively. The only silver lining was Bharti Airtel Ltd, which managed to eke out a 0.19% gain, continuing its recent streak of positive performance.
Expert Insights: Is a Rebound on the Horizon?
Market analysts remain divided on the near-term outlook for the Indian stock market. Akshay Chinchalkar, Head of Research at Axis Securities, noted that the prevailing sentiment is undoubtedly weak, but the decline has reached a mature stage. “With less than 10% of the stocks in the NSE 500 trading below their 100-day averages, the risk of a rebound remains high,” he said.
Rajesh Sinha, Research Analyst at Bonanza, echoed similar sentiments, attributing the negative sentiment to concerns surrounding US President Donald Trump’s tariff announcement. “The market is pricing in the potential impact of trade conflicts and inflation, which has led to a risk-off approach among investors,” he explained.
Investor Sentiment: What’s the Next Move?
With the stock markets tumbling, investors are faced with a critical decision: Should they exit to cut losses, hold steady in anticipation of a recovery, or buy the dip to capitalize on the volatility? While the answer depends on individual risk appetite and investment horizon, experts suggest that periods of heightened volatility often present opportunities for long-term investors.
Conclusion: Navigating Uncertain Waters
The Indian stock market is navigating a perfect storm of domestic and global challenges. From weak corporate earnings and a falling rupee to escalating trade war fears, the headwinds are strong. However, as history has shown, markets are cyclical, and periods of decline are often followed by recoveries. For now, investors must tread cautiously, keeping a close eye on global developments and corporate earnings trends.
As the market continues to grapple with uncertainty, one thing is clear: Volatility is here to stay, and only those with a well-thought-out strategy will be able to weather the storm. Whether you choose to exit, hold, or buy the dip, the key lies in staying informed and making decisions based on sound analysis rather than emotions.