Sensex down 1%, Nifty 50 down nearly 2% in February

At the close, the Sensex closed 326.23 points or 0.55 per cent lower at 58,962.12 and the Nifty closed 88.75 points or 0.51 per cent lower at 17,303.95. In the last eight sessions, the Sensex has declined 3.8 per cent while the Nifty has declined 4 per cent.

“The market extended losses for one more session and closed with a cut of around half per cent. Initially the tone was positive but selling resumed as the session progressed. As a result, the Nifty finally closed at 17,303.95. On the sectoral front, most sectors traded under pressure, however selective buying in auto and rebound on the broader front with realty pack kept traders busy,” said Ajit Mishra, VP – Technical Research, Religare Broking.

“The market is yet to see respite from the oversold condition, though the momentum of decline has reduced in recent sessions. We expect Nifty to respect 17,100-17,200 zone, thus chances of consolidation are high. Meanwhile , focus on stock-specific opportunities based on the sectoral trend. And limit leveraged positions,” he said.

The month began with the Indian Budget 2023, when the benchmark indices – Nifty and Sensex – closed in the red, and the weak sentiment continued throughout the month. It only got worse at the end of the month when the minutes of the policy meeting of the Indian and US central banks hinted at higher interest rates for the longer outlook. The indices fell below several support levels in the last week of February.

The Nifty declined 1.77 per cent in February, while the Sensex declined 1.25 per cent.

In the last week of February, Nifty breached its crucial level of 17,800 on the back of concerns around US inflation, which capped the index’s move. Besides, Nifty re-tests its intraday low of 17,353, hit on Budget day; The Sensex also crossed the psychological levels of 60,000 and 59,000.

“Weakness persisted on global as well as domestic fronts due to concerns over prolonged interest rate cycle. Nifty opened on a flat note on February 28 and witnessed selling pressure throughout the day and closed with a loss of 89 points at 17304 level. Sectorally, it was a mixed bag with Realty top gainer – over 1%,” said Siddharth Khemka, Head – Retail Research, Motilal Oswal Financial Services.

“Markets are witnessing continued selling pressure amid global uncertainty, continued selling by FIIs and tightening inflationary measures by central banks around the world. Nifty ended February down 2% – its third consecutive month of losses.” There is a decline. Overall caution is likely.” To stay ahead of key macro data – India’s GDP and US consumer confidence will be released,” Khemka said.

The maximum decline was seen in paints, metal, banking and financial stocks while outperformance was seen in technology and auto stocks.

Bank Nifty closed at 4,269.05, down 0.09 per cent on Tuesday. The index had seen a decline of 4.5 per cent in February. It has declined by about 7.5 per cent in the last two series (December 30 – February 23). Global shocks and sustained stress in major private banks as well as PSU banks dragged down the Bank Nifty.

The month of February saw relatively less participation from Foreign Institutional Investors (FIIs). after outflow of approx. FII has bought close to Rs 30,000 crore in the month of January 2,000 crore in secondary markets. Whereas, Domestic Institutions (DII) made purchases 45,000 crore in the last two months.