Markets trade flat in early deals ahead of F&O expiry

Indian equity benchmarks made a slightly positive start on Thursday tracking broadly positive cues from Wall Street overnight, and soon turned volatile tracking weakness in Asian counterparts as well as foreign fund outflows. The Foreign institutional investors (FIIs) continued their selling on fifth day in a row, as they sold equities worth Rs 3529 crore on February 25. Markets were trading flat in early deals amid selling in Industrials, Consumer Durables and Auto counters, while buying was witnessed in Banking and Metal stocks. Traders were concerned amid prevailing uncertainty over U.S. President Donald Trump's trade policies. Some volatility crept in the markets ahead of Futures & Options (F&O) expiry later in the day.

On the global front, all the Asian markets are trading lower as concerns over a global trade war reignited after US President Donald Trump's latest tariff announcements. He newly indicated plans for 25 percent ‘reciprocal’ tariffs on European autos and other goods. During the first official Cabinet meeting of his new administration, Trump reiterated he is ‘not stopping’ previously delayed tariffs on Canada and Mexico.

Back home, retail sector stocks are in focus as the 58th Retail Business Survey of Retailers Association of India (RAI) showed that India’s retail sector witnessed a 5 per cent sales growth in the retail sector from January 2025 compared to the same time period last year. In stock specific development, Muthoot Finance traded higher after getting RBI's nod to open 115 new branches.

The BSE Sensex is currently trading at 74618.14, up by 16.02 points or 0.02% after trading in a range of 74557.80 and 74834.09. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.34%, while Small cap index was down by 1.28%.

The only gaining sectoral indices on the BSE were Bankex up by 0.27% and Metal up by 0.21%, while Industrials down by 1.57%, Consumer Durables down by 1.41%, Auto down by 1.18%, Power down by 1.06%, Consumer Discretionary down by 1.02% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.31%, Bajaj Finance up by 2.09%, Indusind Bank up by 1.41%, HDFC Bank up by 0.84% and Axis Bank up by 0.53%. On the flip side, Ultratech Cement down by 4.88%, Mahindra & Mahindra down by 1.57%, Tata Motors down by 1.40%, NTPC down by 1.08% and HCL Technologies down by 0.96% were the top losers.

Meanwhile, Moody's Ratings said that India has a lower overall exposure to the US relative to others in the APAC region, although certain sectors such as food, textiles and pharmaceutical products face risks. It said most companies in its rated portfolio are domestic-focused with limited exposure to the US market. To mitigate pressure from reciprocal tariffs, the US and India are reportedly engaged in talks to lower import tariffs on select US products, increase market access for US farm products and increase US energy purchases, while seeking to initiate a trade deal by the fall of 2025.

Ratings agency has said across APAC, developing countries like India, Vietnam and Thailand have among the widest rate differentials relative to the US. It said electronics, motor vehicles, food and textiles are the most exposed sectors. In addition to the hit from lower export demand, a key risk facing emerging economies in the region is that those aiming to nurture an export-led growth model similar to China and other advanced APAC economies will find it difficult to compete in an increasingly interventionist trade environment. US President Donald Trump has announced he will impose reciprocal tariffs on its trading partners, including India. The new US administration has already enacted additional 10 per cent tariffs on imports from China and 25 per cent tariffs on steel and aluminium.

Moody's said while the US is an overall net exporter of food, feeds and industrial supplies to APAC, it is a net importer of capital goods, automotive vehicles and parts and consumer goods. Reciprocal tariffs will have an impact on a number of key sectors in APAC with exposure to US final demand, such as computer and electronic products, chemicals, motor vehicles, as well as food, textiles and wood products. It said APAC's overall policy response will be crucial in determining the full impact on credit strength. It added ‘We expect governments will likely act pragmatically, aiming to avoid escalation with the US, preferring to negotiate on a bilateral basis, as shown by recent developments’.

The CNX Nifty is currently trading at 22537.30, down by 10.25 points or 0.05% after trading in a range of 22535.05 and 22613.30. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 4.52%, Bajaj Finserv up by 2.39%, Bajaj Finance up by 2.00%, Hindalco up by 1.28% and Indusind Bank up by 1.22%. On the flip side, Ultratech Cement down by 5.31%, Trent down by 2.34%, Bajaj Auto down by 2.03%, Hero MotoCorp down by 1.70% and Mahindra & Mahindra down by 1.54% were the top losers.

All Asian markets are trading lower; Hang Seng declined 252.13 points or 1.06% to 23,535.80, Taiwan Weighted lost 166.97 points or 0.71% to 23,235.58, Jakarta Composite fell 86.95 points or 1.32% to 6,519.23, KOSPI dropped 28.00 points or 1.06% to 2,613.09, Nikkei 225 slipped 21.74 points or 0.06% to 38,120.63, Shanghai Composite weakened 13.76 points or 0.41% to 3,366.45 and Straits Times was down by 3.98 points or 0.1% to 3,904.07.