Indian Stock Market Faces Significant Setback on February 11, 2025
Equities Tumble Amid Escalating Global Tensions and Selling Pressure
The Indian stock market experienced a sharp decline on Tuesday, February 11, 2025, with the BSE Sensex plummeting by 1,281 points, or 1.65%, to reach an intraday low of 76,030.59. Similarly, the National Stock Exchange (NSE) Nifty index fell below the 23,000 mark, dropping 395 points, or 1.68%, to a low of 22,986.65. By the close of trading, the Sensex finished down 1,018.2 points at 76,293.6 and the Nifty50 closed at 23,071.8, reflecting a decrease of 309.8 points.
Major Contributors to the Market Decline
Sector Struggles and Notable Stock Performance
The day’s trading revealed several underperformers, particularly on the BSE and NSE. Stocks such as Zomato, Tata Steel, Bajaj Finserv, Tata Motors, and Power Grid were among the top laggards on the BSE. The NSE saw significant declines from Eicher Motors, which dropped over 6%, as well as Apollo Hospitals, which fell by more than 5%. Shriram Finance slipped over 4%, while Bharat Electronics (BEL) and Coal India dropped by more than 3%.
Several factors contributed to the downturn, including:
1. Concerns Over Tariff Hikes:
The market reacted negatively to tariff increases announced by U.S. President Donald Trump on steel and aluminum imports, set at a flat 25%. Concerns were amplified by Trump’s intentions to impose ‘reciprocal tariffs’ on other nations in the coming days. According to global brokerage Nomura, these tariffs could adversely affect emerging Asian economies, including India, due to the U.S. being India’s largest export destination. This development poses risks to India’s economy, as the U.S. accounted for around 18% of India’s total exports.
The impact was immediate, with the Nifty Metal index declining over 1%, and notable declines in stocks like JSW Steel and Hindustan Zinc, both down more than 4%.
2. Quarterly Earnings Reports:
Eicher Motors’ shares took a hit, slumping 6.8% to an intraday low of Rs 4,966.15, after the company reported disappointing Q3 earnings. The company’s earnings before interest, tax, depreciation, and amortization (EBITDA) margin fell to 24.2%, contracting 190 basis points compared to the previous year.
Similarly, Apollo Hospitals saw its shares decrease by 5% despite reporting a 51.8% year-on-year increase in consolidated profits for Q3. Analysts indicated that the decline was due to profit booking after strong results.
3. Foreign Institutional Investor (FII) Sales:
A consistent sell-off by Foreign Institutional Investors has further weighed on market sentiment. On the previous trading day, FIIs sold equities worth Rs 2,463.72 crore. Cumulatively, they have offloaded Rs 78,027 crore in January, with ongoing sales totaling Rs 85,841 crore thus far in February. Analysts suggest that FIIs may delay significant investments until the local currency stabilizes, indicating continued selling in the near term.
Broader Market Weakness and Sectoral Trends
The broader markets reflected similar trends, with both BSE Midcap and Smallcap indices slipping over 3%. Notable drops included PB Fintech and Uno Minda, among others, with several stocks in the Smallcap index falling significantly.
Sector-wise, broad-based selling was observed, with the Nifty Realty, Nifty Auto, and several others declining by more than 2%.
Global Market Influences
Asian markets mirrored the Indian declines, particularly in response to Trump’s tariff decisions. Chinese stocks saw significant dips, with indices like the CSI 300 dropping by 0.40%. Conversely, European markets exhibited mixed trends, with Germany’s DAX remaining relatively flat.
Technical Outlook
From a technical standpoint, the Nifty50 faced resistance around the 23,450 level, with recent bearish trends suggesting ongoing selling pressure. Jigar S Patel, a senior technical research analyst, indicated that bullish sentiment would require the Nifty50 to close above this resistance level to show signs of recovery. Until such a reversal occurs, caution is recommended for traders, who may continue to see further declines or consolidation at lower levels.
As the market navigates these turbulent waters, investors remain on edge, closely monitoring both domestic and international developments that influence market dynamics.
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