Equity markets started the day cautiously on Tuesday, with mixed signals as the Sensex commenced at 74,440.30, slightly lower than its previous close of 74,454.41. Currently, the Sensex is trading at 74,757.22, up by 302.81 points or 0.41 per cent. Similarly, the Nifty opened at 22,516.45 compared to its previous close of 22,553.35, and is now at 22,612.25, gaining 58.90 points or 0.26 per cent. This slight recovery comes after a sharp sell-off on Monday, where the Sensex dropped 857 points and the Nifty fell 243 points, especially impacting IT and digital indices with declines over 2 per cent.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the market is oversold and large-cap valuations are fair, signaling a potential bounce-back. However, concerns arise from the ongoing FII selling, which has reached ₹43,200 crore in February alone. Foreign Institutional Investors (FIIs) pulled out equities worth ₹6,286 crore on February 24, widening the gap caused by their ₹3 lakh crore sell-off since October 2024. In contrast, Domestic Institutional Investors (DIIs) bought equities worth ₹5,185 crore.
Auto and financial stocks led today’s early gains, with Mahindra & Mahindra topping the charts, up by 2.38 per cent. On the other hand, metal stocks faced pressure, with Hindalco leading the losers with a 2.65 per cent drop.
Market analysts express caution due to global trade tensions, particularly President Trump’s implementation of tariffs on Canada and Mexico. Global markets have also been affected, with Asian markets falling by up to 2 per cent and US markets closing with mixed results. Technically, current market levels are seen as critical support zones, with 22650/74900 identified as decisive levels.
Looking ahead, market volatility is expected to increase with the F&O expiry for the February series approaching on Thursday. Investors are advised to stick with quality stocks and exercise patience for the anticipated recovery.
The overall sentiment is cautious with concerns about global trade wars and AI disruptions affecting market dynamics. Technical indicators suggest potential further market dips, with key support levels ranging from 22,350 to 22,200. Traders are advised to wait for confirmation at critical levels before initiating new positions to navigate the current market uncertainty.
