Sensex, Nifty: Ahead of PM Modi's visit to US for a high-stakes meeting with Donald Trump, the Indian stock market had crashed for six consecutive sessions with Sensex and Nifty falling by over 3%. Notably, the bearish stick in Indian stocks persists as Nifty tested around January's low of 22,800. Developments between Modi and Trump's meeting would be among the key factors to influence market sentiment.
Sensex, Nifty:
On February 12, Sensex closed at 76,171.08, down by 122.52 points or 0.16%, while Nifty 50 ended at 23,045.25 lower by 26.55 points or 0.12%. The Wednesday session was a roller coaster ride as Sensex and Nifty recovered in the closing hours after declining by more than 1% each.
Explaining the latest performance, Prashanth Tapse, Senior VP (Research), Mehta Equities said, "Markets were extremely choppy and gyrated sharply in intra-day trades. After crashing over 900 points in early trades, markets recouped lost ground in late trades but select profit-taking in IT, banking and auto stocks saw benchmarks end marginally lower. Due to rising uncertainty in global and domestic markets coupled with falling rupee and fund outflows, investors are trading cautiously and placing safe equity bets."
Notably, Sensex and Nifty are in deep red for six consecutive sessions. From February 5th to 12th, Sensex has nosedived by 2,412.73 points or 3.07%. While Nifty 50 has shed 694 points or 2.92% during this period.
The last time Sensex and Nifty were in green was on February 4th and at that time they held around 78,500 and 23,730 levels.
How the Indian Market Will React Amidst PM Modi's Meet With Trump On February 13?
After imposing a hefty tariff conundrum on Mexico, Canada and China, on February 11, the US withdrew all country-specific duty exemptions on steel imports given under Section 232 of the Trade and Expansion Act of 1962, with effect from March 12, 2025.
This removes all preferential market access given in the form of tariff waivers or tariff exemption volume quotas to countries like Canada, Brazil, the European Union (EU), Mexico, South Korea, Japan, Argentina, Australia, and Ukraine.
India is expected to be impacted by Trump's latest tariff and hence PM Modi's meeting with the 47th President of the US is pivotal.
Trade Setup For Thursday:
Shrikant Chouhan, Head Equity Research, Kotak Securities view, "We are of the view that as long as the market is trading above 22950/75500, the pullback formation is likely to continue. On the higher side, it could bounce back to the 23200-23250/76700-76800 range. Conversely, if it falls below 22950/75500, selling pressure is likely to accelerate. If that happens, the market could retest the 22800/75000 level. Further downside movement may also persist, potentially dragging the market down to 22725/74700."
To investors, Ajit Mishra - SVP, Research, Religare Broking: Persistent selling by FIIs, coupled with mixed earnings, continues to weigh on market sentiment, while uncertain global cues add to the pressure. On the technical front, Nifty rebounded after testing its January low of around 22,800, and sustaining above this level could offer some relief. However, the broader trend remains negative unless a clear reversal pattern emerges. Given the current scenario, traders should exercise caution and continue with a hedged approach."
Trump's Tariff Impact On Market?
According to Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services on Markets, US Equities remain range bound during the week - with blips of volatility around tariffs and soft earnings. January job's data (NFP report) was strong yet again, adding 143k - this now leaves the 3-mth average at 237k (strong). The tariff saga continues - with TRUMP announcing 25% tariffs on aluminium and Steel early this week.
HE added, while, the market is getting fatigued of this recurring news flow, the uncertainty would continue to prevail and may keep the market volatility high. For impact on Indian markets, we opine - a relative benefit to Indian exports to the US, should be negated by China's reaction (likely price cuts) and another round of DXY appreciation - which would hurt equities and the currency
In case of India, Gandhi said, INDIA equities had a rough week, extending its time correction - SMID indices were hardest hit, with both MID/Small cap indices losing around 6%. The sentiment has completely gone sour. But, on valuation front, both SMID indices are now below the LT average band. Not much to take out of the Earnings this week - but, Autos gave good numbers - M&M outlined very strong outlook for tractors; Hero maintained double digit growth outlook with company scaling back some of the lost market share. Consumer names continue to see volume growth and margin pressures. In the MSCI Feb review - we saw inclusion of Hyundai and deletion of Adani Green from the Global standard Index.
Furthermore, Gandhi said, lot of action on the liquidity front this week - while a conventional 25bps rate cut was largely priced-in, there was some market disappointment on lack of further liquidity measures during the MPC meet. On further liquidity measures, we expect RBI would have to do additional OMOs amounting to INR 400bn, followed by more VRRs and FX swaps to tackle the liquidity deficit that is likely to turn ugly again by March end. This liquidity infusion and would be incrementally positive for the Banks, especially the ones starving for liquidity - HDFCB, IIB likely to get further leg up here
The analyst maintained Nifty Dec -25 target of 25000. He said, for sector positioning - we retain our tilt toward consumption and add our weights on Consumer Discretionary (CD), which is our preferred route to play the consumption theme. Incremental growth is sharpest for these sectors and valuations are still reasonable.
Tactically - we see a strong base for Nifty at 22800, Gandhi lastly said.
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