Stock market recap: Indian equities witnessed a significant sell-off on Monday, 2 March, as escalating geopolitical tensions in West Asia triggered a global "risk-off" sentiment.
The Nifty 50 plummeted 312.95 points (1.24%) to settle at 24,865.70, while Sensex shed 1,048.34 points (1.29%) to close at 80,238.85 in a volatile session. India VIX, or the fear gauge, surged more than 20% to cross the 17 level.
Market breadth was decisively bearish, with a weak advance-decline ratio on BSE, where nearly six stocks declined for every one that advanced. The downturn was primarily driven by a sharp spike in Brent crude prices, touching a 14-month high of $82.40 per barrel, following reports of the US-Israeli strikes on Iran.
Sector-wise, Nifty Realty and Auto were the biggest laggards due to inflation and interest rate concerns, while index heavyweight Larsen & Toubro fell more than 4%. Conversely, Bharat Electronics Ltd and ONGC showed resilience, gaining on defense interest and energy pricing.
Two stock recommendations for today by MarketSmith India
Buy: Bharat Electronics Ltd (current price: ₹454)
- Why it’s recommended: Strong defence sector tailwinds, robust order book visibility, government focus on indigenisation, Navratna PSU status, consistent revenue growth, and healthy operating margins.
- Key metrics: P/E: 54.81, 52-week high: ₹461.65, volume: ₹1,583.04 crore
- Technical analysis: Consolidation base breakout
- Risk factors: High dependence on defence orders, revenue concentration from government clients, policy and budget allocation risks, delays in order execution, working capital intensity, margin pressure from competition, and export order volatility
- Buy: ₹450–456
- Target price: ₹525 in two to three months
- Stop loss: ₹430
Buy: Paras Defence and Space Technologies Ltd (current price: ₹670)
- Why it’s recommended: Growing defence and aerospace demand, focus on high-tech products (missiles, radars), increasing order inflows, strong R&D capabilities, government push for defence indigenisation, strategic industry partnerships, and export potential growth
- Key metrics: P/E:71.98, 52-week high: ₹972.50, volume: ₹1,240.18 crore
- Technical analysis: Cup-with-handle breakout
- Risk factors: Dependence on defence contracts, order execution delays, long receivable cycles, capital-intensive business, high competition from larger PSUs, regulatory and clearance risks, and geopolitical demand uncertainty
- Buy at: ₹665-680
- Target price: ₹750 in two to three months
- Stop loss: ₹631
How the Nifty 50 performed on 2 March
Indian equities ended sharply lower on 2 March, with the Nifty 50 declining 312.95 points, or 1.24%, to close at 24,865.70, after slipping to an intraday low of 24,603.50. Sensex mirrored the weakness, as risk-off sentiment and broad-based selling weighed on benchmarks through most of the session.
Market breadth was decisively negative, with 651 stocks advancing and 2,579 stocks declining, and 67 remaining unchanged, underscoring the intensity of the sell-off. On the sectoral front, losses were led by Auto, Consumer Durables, Oil and Gas, and PSU Banks, while Financial Services and IT also closed in the red. In contrast, Metals and Pharma showed relative resilience, managing marginal gains. The Nifty Financial Services Ex-Bank and Private Bank indices remained under pressure, reflecting continued caution in heavyweight lenders.
Nifty 50 continues to exhibit corrective price action, forming a sequence of lower-highs on the daily chart and trading below its short-term moving averages, indicating persistent selling pressure. The index recently tested its Budget Day low and managed a brief intraday bounce. However, the recovery lacked follow-through buying, underscoring a fragile undertone. A downward-sloping trendline drawn from the recent swing highs remains intact, reinforcing the prevailing short-term downtrend structure.
Momentum indicators further validate the cautious outlook. The RSI has slipped below 50 and is trending lower near the mid-40s, reflecting weakening momentum and the absence of strong bullish divergence. Meanwhile, the MACD remains in negative territory with the signal line above the MACD line, indicating sustained bearish momentum, although histogram contraction suggests intermittent pullbacks.
According to O’Neil’s methodology of market direction, the Indian equity market has transitioned from a Downtrend to a Rally Attempt, indicating an early improvement in the near-term market tone.
Nifty continues to trade below its 200-DMA, reinforcing the prevailing weak medium-term structure. The recent gap-down breach of the 25,000 psychological mark signals heightened selling pressure and a deterioration in sentiment. Notably, a sustained move below the Budget Day low of 24,570 increases the probability of an extended decline toward 24,300, with 24,000 emerging as the next key downside objective if weakness persists. On the upside, 25,300–25,500 is likely to act as a significant supply band, where prior price congestion and overhead positions could cap recovery attempts.
How did Nifty Bank perform?
Nifty Bank opened on a weak note and remained under pressure through the session, eventually closing in the red. After opening at 59,204.30, the index moved higher to touch an intraday high of 60,177.50. However, it failed to sustain gains and witnessed profit booking at higher levels. Selling intensified in the latter half of the session, dragging the index to an intraday low of 59,148.00 before it finally settled at 59,839.65, down by 1.14%.
The inability to hold above short-term resistance indicates a cautious undertone. This price behaviour reflects distribution at higher levels and hesitation among participants to chase momentum amid prevailing macro uncertainty. The rejection near higher levels suggests that bulls are currently losing short-term control.
From a momentum perspective, the RSI is placed at 44.06, drifting below the neutral 50 mark, indicating weakening strength and fading buying momentum. The RSI’s downward slope signals cautious sentiment and limited upside conviction in the near term. Meanwhile, the MACD remains in positive territory but is showing signs of convergence, with the histogram slipping into the negative zone, suggesting early signs of momentum slowdown. This crossover behaviour often precedes short-term consolidation or corrective phases. Together, the RSI softening and MACD flattening indicate that momentum is becoming fragile. This aligns with the recent price action where rallies are being sold into, pointing toward a possible pause in the prevailing trend.
On the technical front, immediate support is seen near 59,100–58,800, aligning closely with the 100-DMA, while stronger support is placed around 57,400, near the 200-DMA. On the upside, resistance is visible near 60,600–61,000, where the index faces supply pressure near short-term moving averages.
Given the broader market volatility and evolving global risk cues, Nifty Bank may remain range-bound in the near term with a downside bias unless it decisively reclaims the 21-DMA. Any sustained move above 61,000 could revive bullish sentiment, while a breach below 59,000 may trigger deeper corrective pressure in the coming sessions.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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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 making any investment decisions.