Stock Market Update: Nifty, Sensex Decline Amid Global Uncertainties

Market Performance

Indian stock markets concluded the shortened trading week on a negative note as global uncertainties outweighed the positive impact of easing inflation in India and the US. Key indices, including the Nifty and Sensex, declined, primarily due to the downturn in the automobile and information technology sectors.

At the market close, the Sensex dropped 200.85 points, equivalent to 0.27%, to 73,828.91. Meanwhile, the Nifty declined by 73.30 points, or 0.33%, to 22,397.20. Overall, market sentiment remained negative, with 1,463 stocks advancing, 2,348 declining, and 123 remaining unchanged.

The Indian stock market will remain closed on Friday in observance of Holi.

Economic and Market Trends

The trading session commenced positively, influenced by favorable global indicators following a milder-than-expected US inflation report. This raised hopes of potential Federal Reserve interest rate cuts.

On the domestic front, India's inflation for February fell to a seven-month low of 3.61%, staying below the Reserve Bank of India's (RBI) target of 4%. This figure was also lower than the Reuters estimate of 3.98%.

Despite these encouraging macroeconomic indicators, broader economic concerns and escalating global trade tensions continued to impact investor sentiment, leading to market declines.

Sectoral Performance

Most sectoral indices ended in negative territory, with 12 out of 13 significant indices recording losses. The Nifty Media and Nifty Realty indices experienced the most significant declines, dropping nearly 2%. Additionally, the Nifty Auto index ended more than 1% lower, while the Nifty IT index continued its downward trend, falling another 1%.

The Nifty IT index has entered bear market territory, falling over 21% from its peak. In the latest session, the index declined by nearly 3%. Major IT firms recorded losses, including Wipro, TCS, Infosys, HCLTech, and Tech Mahindra.

Other indices such as Nifty Infra, Nifty Pharma, Nifty Bank, Nifty FMCG, Nifty Realty, and Nifty Metal also posted up to 0.6% declines. Midcap stocks faced selling pressure, with the key index slipping 0.8%, while small-cap stocks saw a steeper fall of over 1%.

Company Performance

• Top Gainers: Stocks such as SBI, ICICI Bank, and Bharat Electronics recorded gains.
• Top Losers: Shares of Shriram Finance, Bajaj Auto, and Tata Motors faced declines.

Shares of Adani Green Energy closed over 2% higher following an update on the company's expansion plans. Meanwhile, Mahanagar Telephone Nigam (MTNL) witnessed a surge of over 12% after the government announced that the company had generated Rs 2,134.61 crore from asset monetization up to January 2025.

Global Trade Developments

Market sentiment remained subdued despite easing inflation, primarily due to intensifying global trade disputes. The trade war between the US and its key trading partners has escalated, with multiple nations announcing retaliatory tariffs. Canada implemented a 25% tariff on $20 billion worth of US goods, while the European Union outlined countermeasures affecting up to 26 billion euros ($28.31 billion) worth of American products.

These developments contributed to ongoing concerns about global economic stability, influencing market movements.

Summary

The Indian stock market faced downward pressure due to persistent global uncertainties despite favourable domestic and international inflation data. Sectoral indices broadly declined, with IT and auto stocks leading the losses. Broader economic concerns, including trade tensions and valuation pressures, played a crucial role in investor sentiment. Moving forward, market performance will likely remain influenced by global financial developments and monetary policy expectations.