Bears take full control over Dalal Street

Indian equity markets continued to trade lower in late afternoon session as the escalating global trade conflict worries the Dalal street. The market sentiments dampened after US President stated that the 25% duties on imports from Canada and Mexico would come into effect on March 4 and will levy additional 10% charges on Chinese goods increasing fears of rising trade conflict. Market participants are becoming cynical about Fed’s further rate cut owed to disappointing US economic cues. Traders overlooked IMF’s report stating India’s economic growth remained robust, with Gross domestic product (GDP) growth of 6 percent Y-o-Y in the first half of 2024/25. 

On the global front, both Asian and European equity markets were trading lower. Back home, as the broader markets were trading lower small caps took the most hit, due to valuation concerns.

The BSE Sensex is currently trading at 73274.58, down by 1337.85 points or 1.79% after trading in a range of 73159.60 and 74282.43. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index down by 2.58%, while Small cap index was down by 3.00%.

The top losing sectoral indices on the BSE were IT down by 4.37%, TECK down by 4.24%, Telecom down by 3.89%, Auto down by 3.80%, Consumer Disc down by 2.99%, while there were gainers on BSE sectoral index.

The few gainers on the Sensex were HDFC Bank up by 1.57%, Axis Bank up by 0.56% and Reliance Industries up by 0.07%. On the flip side, Indusind Bank down by 6.38%, Tech Mahindra down by 5.69%, Mahindra & Mahindra down by 5.22%, Bharti Airtel down by 4.37% and Zomato down by 4.36% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest report has showed that India’s economic growth remained robust, with Gross domestic product (GDP) growth of 6 percent Y-o-Y in the first half of 2024/25. Inflation has broadly declined within the tolerance band, though food price fluctuations have created some volatility. The financial sector has remained resilient, with non-performing loans at multi-year lows. Fiscal consolidation has continued, and the current account deficit has remained well contained, supported by strong growth in service exports.

According to the report, in 2024/25 and 2025/26, Real GDP is likely to grow at 6.5 percent, on the back of robust growth in private consumption due to sustained macroeconomic and financial stability. Further, it said that headline inflation is likely to converge to target as food price shocks wane. The current account is expected to widen somewhat but remain moderate at -1.3 percent of GDP in 2025/26. Besides, the report noted that India’s financial sector health, strengthened corporate balance sheets, and strong foundation in digital public infrastructure underscore India’s potential for sustained medium-term growth and continued social welfare gains.

IMF report further underlined that deepening geo-economic fragmentation could affect external demand, while deepening regional conflicts could result in oil price volatility, weighing on India’s fiscal position. Domestically, the recovery in private consumption and investment may be weaker than expected if real incomes do not recover sufficiently. Weather shocks could adversely impact agricultural output, lifting food prices and weighing on the recovery in rural consumption. On the upside, deeper implementation of structural reforms could boost private investment and employment, raising potential growth.

The CNX Nifty is currently trading at 22134.15, down by 410.90 points or 1.82% after trading in a range of 22105.15 and 22450.35. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.18%, HDFC Bank up by 1.49%, Shriram Finance up by 1.24%, Axis Bank up by 0.54% and Trent up by 0.24%. On the flip side, Indusind Bank down by 6.41%, Tech Mahindra down by 5.74%, Mahindra & Mahindra down by 5.42%, Wipro down by 5.37% and Bharti Airtel down by 4.48% were the top losers.

All Asian markets are trading lower; Hang Seng declined 776.97 points or 3.39% to 22,941.32, Jakarta Composite plunged 217.11 points or 3.46% to 6,268.34, KOSPI dropped 88.97 points or 3.51% to 2,532.78, Nikkei 225 slipped 1100.67 points or 2.96% to 37,155.50, Taiwan Weighted lost 0 points or 0% to 23,053.18, Straits Times fell 22.89 points or 0.58% to 3,898.30 and Shanghai Composite weakened 67.16 points or 2.02% to 3,320.90.

European markets were trading lower; UK’s FTSE 100 decreased 22.57 points or 0.26% to 8,733.64, France’s CAC fell 41.2 points or 0.51% to 8,061.32 and Germany’s DAX lost 123.07 points or 0.55% to 22,427.82.