The markets remained range-bound and ended nearly 0.6% lower, extending the correction.
With no major domestic triggers, foreign fund outflows and U.S. tariff concerns kept sentiment subdued.
While some pockets showed resilience, they failed to drive a recovery. As a result, both benchmark indices, Nifty and Sensex closed near weekly lows at 22,795.9 and 73,311.1, respectively.
Meanwhile, mid and small cap indices rebounded 1.5% each after a sharp decline, offering some relief.
Market Performance
Here's how the major indices fared:
Index | February 14, 2025 | February 21, 2025 | % Change |
Nifty | 22,929.3 | 22,795.9 | -0.58 |
Bank Nifty | 49,099.5 | 48,981.2 | -0.24 |
Midcap Nifty | 49,654.2 | 50,486.2 | 1.68 |
Sector Performance
Sectoral trends remained mixed, keeping participants engaged.
Metals, Energy, and Realty outperformed, while Auto, Pharma, and FMCG lagged.
After weeks of decline, energy saw a marginal rebound. Pharma weakened amid concerns over potential U.S. tariffs.
Auto extended its decline for the second straight week, weighed down by disappointing quarterly results and concerns over potential EV import tax reductions.
Indices | Weekly Change (%) |
Nifty Metal | 5.16 |
Nifty Energy | 3.34 |
Nifty PSU Bank | 1.67 |
Nifty Realty | 1.57 |
Nifty Select Midcap | 0.98 |
Nifty Media | 0.02 |
Nifty Financial Services | -0.05 |
Nifty Bank | -0.24 |
Nifty IT | -1.86 |
Nifty FMCG | -1.96 |
Nifty Pharma | -2.05 |
Nifty Auto | -2.55 |
Weekly Top Gainers (Nifty 500)
Company | Weekly Gain (%) |
Godrej Industries | 37.75 |
GlaxoSmithKline | 23.44 |
Bikaji Foods | 16.32 |
Rajesh Exports | 15.98 |
NLC India | 14.93 |
Weekly Top Losers (Nifty 500)
Company | Weekly Loss (%) |
PTC Industries | -20.49 |
Kirloskar Oil Engines | -12.73 |
Carborundum Univ. | -10.46 |
Credit Access Gramin | -10.45 |
Natco Pharma | -9.62 |
Stock-specific moves were largely driven by 3Q earnings. Godrej Industries and GSK Pharma ranked among the top gainers.
Meanwhile, weaker-than-expected results saw investors shun underperformers. Natco Pharma extended its decline.
Liquidity Conditions
FII outflows persisted but eased slightly, with net selling at Rs. 7,853 crore during the week.
The good thing is, DIIs stepped in with much stronger buying at Rs. 16,583 crore, more than offsetting the selling pressure.
This dynamic is likely to continue until there’s greater clarity on U.S. tariff policies.
India Equity - Institutional Funds Flow (in Rs. crore)
Date | FII | DII |
February 17, 2025 | -3,998 | 4,760 |
February 18, 2025 | 4,787 | 3,072 |
February 19, 2025 | -1,881 | 1,958 |
February 20, 2025 | -3,312 | 3,908 |
February 21, 2025 | -3,449 | 2,885 |
Total | -7,853 | 16,583 |
Weakness Creeps into the US too
Indian markets remained downbeat as concerns over domestic growth and potential reciprocal tariffs weighed on sentiment.
India’s trade deficit widened to US$ 23 billion in January (December: US$ 22 billion), with exports down 2.4% YoY and imports up 10% YoY.
Notably, FPI flows in the month of February stayed negative for all key emerging markets except Brazil and Thailand. We opine FPI flows are expected to remain volatile.
In the US, markets retreated after hitting new highs, pressured by talks of a Trump-Putin meeting and potential tariffs on autos, pharma, and lumber.
Weak economic data—falling consumer sentiment, a 17-month low PMI (50.4), and a five-year inflation outlook at 3.5%—led to a 2.5% drop in the Dow and Nasdaq.
European and Japanese markets were mixed, with the STOXX 600 up 0.26% but Germany’s DAX down 1%. Japan’s Nikkei lost 0.95% despite stronger-than-expected GDP growth, as bond yields surged.
Meanwhile, China’s tech-driven rally continued, with the Hang Seng jumping 3.79% and Shanghai gaining 1%.
Technical Perspective
A decisive break below 22,700 in Nifty could trigger the next leg of the downtrend, potentially dragging the index to 22,500 and then 22,000.
On the upside, any recovery will first face resistance at 23,150 (20-DEMA), with a breakout above this level potentially extending gains toward 23,600 (200-DEMA).
We reiterate our view to focus on banking and IT, as these sectors have shown relative strength during the correction and will be key in determining the market’s next directional move.
Strategy - Stay Selective,Not Reactive
With a holiday-shortened week ahead, volatility is likely to pick up, driven by the expiry of February’s derivative contracts and global uncertainties, including tariff developments in the US.
Among the sectors, while metals and energy hint at further recovery, pharma remains under pressure.
For investors, the focus should remain on picking quality stocks, rather than reacting to short-term market swings.
Instead of chasing rebounds, this period is best used to accumulate fundamentally strong businesses in a staggered manner, ensuring a long-term perspective rather than short-term speculation.
For traders, the recent bounce doesn’t signal a turnaround. Staying on the sidelines remains a prudent strategy, using any strength to reduce positions and waiting for clearer trends before re-entering.
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