Mumbai: The Indian stock market has been experiencing heightened volatility, with key benchmark indices such as Nifty 50 and Sensex facing resistance at higher levels. Profit booking, macroeconomic uncertainties, and mixed earnings reports have kept investors cautious.
Moving forward, experts predict that market direction will hinge on global trade policies, earnings outcomes, and sectoral trends.
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Stock Market Performance: Key Highlights
Over the past week, Indian equity markets have witnessed a downward trend:
- Nifty 50: Declined approximately 4% since February 5, 2025, now 13% below its September 2024 record high.
- Nifty Midcap 100: Dropped 2.5%, reflecting broad-based selling pressure.
- Nifty Smallcap 100: Declined 3%, with the smallcap index officially entering bear market territory—trading over 20% below its December 2024 peak.
These declines have been attributed to global economic concerns, particularly US tariff policies and slowing corporate earnings, leading to increased investor caution, noted Krishna Appala from Capitalmind Research.
Market Trends and Expert Insights
On February 15, 2025, the Indian stock market continued its downward trajectory for the eighth consecutive session:
- Sensex: Closed 200 points lower at 75,939.
- Nifty 50: Dropped 102 points (0.55%), settling at 22,929.
Despite the ongoing market correction, experts suggest that volatility also presents opportunities for long-term investors. Instead of reacting impulsively to short-term fluctuations, investors should focus on fundamentally strong businesses with promising growth prospects and structural tailwinds.
Economic Tailwinds and Investment Strategies
While current market conditions pose challenges, selective opportunities are emerging. Macroeconomic factors such as recent income tax relief and RBI rate cuts are expected to drive consumption and savings in the coming quarters, supporting economic growth.
Although market valuations are not significantly undervalued, they have moderated, making room for strategic investments in quality stocks.
Investment Recommendations:
- Focus on Strong Businesses: Prioritize stocks with robust fundamentals, competitive moats, and long-term growth potential.
- Adopt a Selective Approach: Amid market volatility, cherry-picking high-quality stocks can help mitigate risks.
- Monitor Global Developments: With domestic catalysts being limited, global trade policies and economic trends will play a critical role in market movements.
Technical Analysis: Bearish Sentiment Prevails
According to Osho Krishnan from Angel One, there was a temporary glimmer of hope midweek, as benchmark indices attempted to stabilize near key psychological thresholds. However, this optimism faded as the week concluded, reinforcing the dominant bearish sentiment.
“As the price action tests both the swing low and the lower boundary of the ‘Falling Wedge’ pattern, it signals a bearish outlook for the market,” said Krishnan. In the absence of major domestic triggers, global economic developments are expected to drive future market trends.
Meanwhile, Vinit Bolinjkar, Head of Research at Ventura Securities, emphasized a selective investment approach, recommending that investors focus on fundamentally strong stocks despite short-term market turbulence.