The Indian stock market witnessed yet another day of relentless selling pressure, as both the Sensex and Nifty extended their losing streak for the eighth consecutive session. The mood on Dalal Street remained somber, with investors grappling with a cocktail of negative cues—foreign fund outflows, mixed corporate earnings, and a weakening rupee. By the closing bell on February 14, 2025, the Sensex had shed 199.76 points (0.26%) to settle at 75,939.21, while the Nifty dropped 102.15 points (0.44%) to close at 22,929.25. The broader markets fared even worse, with the Nifty Midcap and Smallcap indices plunging 2.4% and 3.5%, respectively. Every sectoral index ended in the red, painting a grim picture for market participants.
A Rocky Start and a Bleak Finish
The day began on a slightly optimistic note, with the Nifty opening in the green. However, the optimism was short-lived as selling pressure quickly took over, dragging the index below the psychologically crucial 23,000 mark. The Sensex, too, mirrored this trend, oscillating between gains and losses before succumbing to the bears. By the end of the session, both indices were firmly in negative territory, reflecting the pervasive pessimism among investors.
The top losers on the Nifty included Bharat Electronics, Adani Enterprises, Adani Ports, Sun Pharma, and Trent, each shedding significant value. On the flip side, Britannia Industries, ICICI Bank, Nestle India, Infosys, and TCS managed to eke out gains, offering some respite in an otherwise bleak market. However, their efforts were insufficient to offset the broader market decline.
Sectoral Carnage: No Safe Havens
The sell-off was widespread, with no sector spared from the bloodbath. Media, metal, oil & gas, pharma, PSU Bank, realty, consumer durables, and auto sectors all ended the day with losses ranging between 1% and 3%. The Nifty Pharma index emerged as the worst performer, tumbling 2.87%, while the Nifty IT index managed to limit its losses to a mere 0.01%, making it the best-performing sector—albeit still in the red.
The broader market indices bore the brunt of the selling pressure, with the Nifty Midcap and Smallcap indices plummeting 2.4% and 3.5%, respectively. This underperformance of mid- and small-cap stocks highlights the risk-averse sentiment prevailing among investors, who are increasingly shifting their focus to large-cap stocks in search of stability.
Technical Outlook: A Bearish Canvas
Technical analysts have been closely monitoring the Nifty’s movements, and the outlook remains decidedly bearish. Jatin Gedia, Technical Research Analyst at Mirae Asset Sharekhan, noted that the Nifty has tested the swing low of 22,800 for the third time in the past month. He believes that the index is likely to continue its downward trajectory, potentially testing the lower end of the wedge between 22,670 and 22,600 in the coming week. On the upside, the 23,000-23,100 zone is expected to act as a stiff resistance, with call writers adding significant open interest across the 23,000-23,300 strike prices.
Ajit Mishra, SVP of Research at Religare Broking, echoed this sentiment, emphasizing that relentless FII selling and mixed earnings have put bulls on the defensive. While the Nifty has managed to hold the 22,800 support level so far, the overall market structure suggests further downside risks. Mishra also highlighted the importance of the banking and IT sectors in determining the market’s future direction.
Broader Market Woes: Midcaps and Smallcaps Under Pressure
The broader market indices have been under significant pressure, with the Nifty Midcap and Smallcap indices declining 2.4% and 3.5%, respectively. This underperformance is a reflection of the risk-off sentiment among investors, who are increasingly wary of the volatility in mid- and small-cap stocks. Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, pointed out that the Nifty has formed a triple bottom around 22,780 on the daily charts, indicating strong support. However, the red candles on both daily and weekly charts suggest a lack of strength in any potential upside recovery.
Similarly, Bank Nifty opened with a gap up but quickly reversed course, ending the day down 0.53% at 49,099. The index has formed a red candle on both daily and weekly charts, signaling weakness. Yedve noted that sustaining below the 48,700 level could trigger further downside towards 48,000, while 50,000 remains a key resistance level.
Earnings and External Factors: A Double Whammy
The market’s woes have been exacerbated by a combination of lackluster corporate earnings and external factors. Vinod Nair, Head of Research at Geojit Financial Services, highlighted that corporate earnings have fallen significantly short of market expectations, particularly for mid- and small-cap stocks. This has dampened investor sentiment, leading to increased volatility and foreign fund outflows. The depreciation of the Indian rupee against the dollar has further added to the market’s woes, as it raises concerns about inflation and the cost of imports.
Rupak De, Senior Technical Analyst at LKP Securities, added that the Nifty’s inability to hold the 23,000 level is a sign of weak sentiment. He warned that a decisive fall below 22,800 could trigger panic selling, while 23,100 remains a key resistance level. Until the Nifty manages to break above this level, the market is likely to remain under pressure.
Currency and Commodities: A Mixed Bag
On the currency front, the Indian rupee managed to eke out a slight gain, closing at 86.83 per dollar compared to Thursday’s close of 86.89. While this provided some relief, it was insufficient to offset the broader market’s negative sentiment. Meanwhile, in the commodities market, crude oil prices remained volatile, adding to the uncertainty for energy stocks.
What Lies Ahead?
As the market heads into the weekend, investors are left grappling with a host of uncertainties. The ongoing FII selling, mixed corporate earnings, and external factors like tariffs and currency fluctuations are expected to keep the market under pressure in the near term. While the Nifty has managed to hold the 22,800 support level so far, the risk of a further downside remains high.
Traders and investors are advised to tread cautiously, with a strong emphasis on risk management. The performance of the banking and IT sectors will be crucial in determining the market’s direction in the coming weeks. Until there is clarity on corporate earnings and external factors, volatility is likely to remain elevated, keeping the bears in control.
In conclusion, the Indian stock market is navigating through choppy waters, with no immediate signs of relief. While the long-term growth story remains intact, the near-term outlook is clouded with uncertainty. As always, staying informed and being prepared for volatility will be key to navigating these challenging times.