The stock market benchmarks experienced significant strain, primarily induced by the enforcement of a 25% tariff increase on India by US President Donald Trump. This move considerably impacted the confidence of the investors. Unpredictable foreign fund flows and the persistent anxiety concerning global economic growth and currency stability further escalated the ambivalence. Added to this, there were substantial promoter stake operations in leading firms like IndiGo, profit realization in the most recent high performers, and qualms about high valuations, the market felt the strain extensively.
Sensex, the benchmark index, saw a 0.76% fall equivalent to 615.39 points and was at 80,171.15 at 1.34 pm, after plunging to an intraday dip of 80,093.52. Its counterpart, Nifty 50, slipped 174.75 points or 0.71% and was valued at 24,537.30 points. On Thursday, during the mid-trading session, Sensex had a deep dive of nearly 693 points from the previous closing, and Nifty followed with a 204 point decline.
The pressure was also felt by the midcap and smallcap indexes as they recorded a decrease of 0.85% and 0.88%, respectively. All sector-specific indices, except for consumer durables, revealed negative trends. Real estate and IT indices took a hit with a 1% dip. However, Hero Motocorp managed to stay in the green, documenting over 1% profits. Asian Paints, Titan, Bajaj Finance, and Adani Enterprises also noted a modest increase.
The downturn extended to Shriram Finance, HCL Tech, Infosys, TCS and Power Grid, as they recorded a depreciation between 1-4%. The market illustrated a frail sentiment as the number of declining stocks surpassed the advancing ones. Out of the 2,975 stocks traded on the National Stock Exchange, 1,832 stocks closed on a lower note, whilst 1,054 stocks advanced, and 89 remain unchanged.
An interesting revelation came in the form of 27 stocks, including Lumax, Eicher Motors, TVS Motor, and Uno Minda, which reached their 52-week high, marking a significant milestone. Conversely, 68 stocks, such as AIA Engineering, Equitas Bank, Khadim and Jindal Saw, experienced a downturn, touching their 52-week low point.
There was a considerable flux in certain stocks. 52 stocks including names like JP Power and NACL, were locked in the upper circuit. Simultaneously, 69 other stocks hit the lower circuit. Nevertheless, the total market capitalisation still held steady at an impressive ?445.99 lakh crore, which is approximately $5.08 trillion.
On the BSE, certain stocks attracted attention. Cases in point, Vardhman Textiles, Ola Electric, Advanced Enzyme Technologies, JP Power, and Sudarshan Chemicals which soared between 5-9%. On the other side of the spectrum, IndiGo, CSB Bank, Eclerx Services, Rallis, and Olectra Greentech recorded a decline between 4-5%.
Segments like textile, leather, gems, and jewellery stocks received a fair amount of attention due to the role tariffs play in their performance. Defence stocks also found themselves in the negative trading region. Ola Electric (+9%), Waaree Energies, Kalyan Jewellers, Petronet, and Voltas stood out as the noteworthy gainers of the Nifty Midcap 100 index.
Bharti Hexacom, Aditya Birla Fashion and Retail, ATGL, Page Industries and Phoenix Mills, part of Nifty Midcap 100, saw a 3-4% depreciation. Elsewhere in the smallcap sector, ACE, Godfrey Phillips, HBL Engineering, Swan Energy and KPIL noted a rise of 1-3%.
However, a slight tumble was spotted in the smallcap players. First Cry, Sagility, CESC, India Mart and Angel One marked a fall ranging from 3 to 4%. These market fluctuations reaffirmed the volatile nature of the stock market; influenced by a complex bunch of factors comprising not just national elements but global geopolitical maneuvers as well.
The 25% tariffs imposed by the US played a massive role in the market rebound. These tariffs acted as a deterrent, overcasting a shadow of uncertainty and caution over investors. This, coupled with major stake sales and profit booking, aggravated the market stress, indicating the interplay of global political decisions and market dynamics.
In this episode, the technology sector, particularly IT, was one of the worst hit. The drop in shares of IT giants like Infosys and TCS led to the IT index registering a decline of over 1%. Even small and mid-cap indexes couldn’t avoid the repercussions of the downturn, thereby echoing the overall market temperament.
As we observed, the roller-coaster market dynamics even pulled down the shares of financial institutions. HCL Tech and Shriram Finance are clear examples. However, amidst all the negativity, some stocks managed to hold their turf. Hero Motocorp and companies such as Asian Paints, Titan, Bajaj Finance, Adani Enterprises could post a marginal increase amidst all the volatility.
While all sectors painted a relatively grim picture, one sector managed to swim against the tide – the consumer durables sector. This index stood strong amidst the widespread market turbulence, underlining the consumption-driven aspects of the economy that retain their strength even in times of market unrest.
Markets globally are intricate and interlinked systems. Their movements are consequence of a myriad of national and international factors. The current scenario, impacting the Indian stock market, is a stern reminder of how geopolitical decisions can cast their effects on finance and trade.
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