Stock market today: Sensex, Nifty 50 resume downtrend after 1-day hiatus but end off day’s lows
Indian markets recovered from early losses, with Nifty 50 down 0.06% and Sensex up 0.04%. The broader market underperformed, as Nifty Midcap 100 fell 0.20% and Smallcap 100 dropped 1.59%. Investors are adopting a buy-on-dips approach.
Indian Stock Market: After a mild recovery in the previous trading session, Indian markets resumed their downward trend on Tuesday, February 18. However, the markets managed to recover early losses, indicating that investors are adopting a 'buy on the dips' strategy.
Both front-line indices started the trading day in the red, with losses reaching up to 0.70%. However, by mid-session, they had swiftly recovered a majority of the losses, and the positive momentum continued to build, leading to a stable close.
The Nifty 50 recovered 137 points during the day to close at 22,945 points, marking a minor decline of 0.06% compared to the previous close. Meanwhile, the Sensex gained 491 points from its low and ended the session with a marginal gain of 0.04%, closing at 75,967 points.
The broader market also rebounded sharply from the day’s lows but underperformed the benchmark indices. The Nifty Midcap 100 concluded the session with a drop of 0.20%, settling at 49,751, while the Nifty Smallcap 100 index finished the session at 15,127, down 1.59% compared to Monday’s closing level.
Today's market recovery can be attributed to the sustained selling pressure in recent sessions, which has led to stocks entering oversold territory, creating opportunities for a technical rebound as investors capitalise on the correction.
Meanwhile, stocks are moving back and forth in recent sessions as investors continue to assess market conditions, driven by concerns over global trade tensions, rich valuations and mixed corporate earnings reports.
Since Donald Trump took charge as the US President last month, he has imposed a 10% tariff on Chinese imports, announced and delayed 25% tariffs on goods from Mexico and non-energy imports from Canada, set a date for 25% tariffs on imported steel and aluminium, and is planning reciprocal tariffs on all countries taxing U.S. imports.
There are also reports suggesting that he will impose tariffs on automobiles, which is making investors jittery about global trade prospects, the potential for retaliatory actions, and the risk of slowed economic growth, alongside heightened inflationary pressures.
As traders continue to monitor tariffs, their focus is now shifting to the Federal Reserve's January meeting minutes, due on Wednesday, for clues on how policymakers view the growing risk of a broader trade war on economy.
Commenting on today's market performance, “Vinod Nair, Head of Research, Geojit Financial Services, said, “The domestic market has experienced both profit booking and bottom-fishing amid persistent concerns over FII outflows and pressure on the INR. Small and mid-cap stocks continue to lag due to apprehensions about premium valuations.”
"Meanwhile, India’s trade deficit has widened beyond expectations, driven by rising imports due to depreciating domestic currency and surging commodity prices. Currently investors are exploring bargain-hunting opportunities due to deep correction in price, but modest earnings growth and global uncertainties are constraining momentum," he added.
Technical Outlook
Rupak De, Senior Technical Analyst at LKP Securities, said, "Nifty witnessed another day of volatility as the index failed to take a clear direction. In the short term, Nifty might remain a 'sell on rise' as long as it stays below 23,150. Support is placed at 22,800, and a fall below this level might trigger further correction. Immediate resistance is placed at 23,000."
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates stated, "Nifty has formed a hammer candlestick pattern near a multiple support zone, indicating strength. As long as the index holds the recent low of 22,725, a buy-on-dips strategy remains favourable. The 21-Day Simple Moving Average (DSMA) at 23,240 acts as an immediate hurdle, and a decisive move above this level could confirm a near-term bottom reversal."
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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