The Sensex and Nifty closed flat on March 3, after falling over half a percent around noon. While oil & gas and financial services stocks dragged the Nifty lower, IT stocks provided some support. Volatility ruled the session as global trade concerns kept investor sentiment fragile.
The indices had opened higher, attempting a rebound after their longest monthly losing streak since 1996. A surprise uptick in domestic growth briefly lifted spirits, but persistent global uncertainties quickly erased those gains.
At close, the Sensex was down 22 points at 73,176, while the Nifty rose 19 points, to 22,143. Market breadth remained weak, with 769 stocks advancing and 1,898 declining on the NSE.
In the previous session, both indices had plunged nearly 2 percent to nine-month lows. Concerns over slowing domestic growth and aggressive U.S. tariffs have dragged the Nifty and Sensex down 19 percent and 18 percent, respectively, from their September peaks. Meanwhile, the broader small- and mid-cap indices have tumbled over 20 percent from their record highs, officially entering bear market territory.
Relentless foreign selling has deepened the market downturn, with FIIs offloading Rs 58,988 crore worth of Indian equities in February. Domestic investors, however, have been a counterforce, purchasing stocks worth Rs 64,853 crore.
"The primary factor driving the sell-off is the continued selling by FIIs," said Ravi Diyora, Director of Research at Kunvarji Group. "Another major concern is Donald Trump’s policies, which change overnight, adding to market uncertainty."
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A lackluster Q3 FY25 earnings season has only made matters worse. "Over the last two to three quarters, fewer than 50 percent of Nifty 50 companies have managed to beat earnings expectations. This is the first time since COVID that we've seen such a trend. Earnings downgrades and missed estimates have contributed to the ongoing market decline."
Adding to the pressure, March typically sees lower investment activity as investors focus on financial year-end obligations, further limiting buying interest.
Fresh data released on February 28 showed India's economy grew 6.2 percent in the October-December quarter, driven by robust government and consumer spending. However, optimism was short-lived. "As strong as the GDP numbers seem, they don’t fully account for the impact of new tariff uncertainties," Diyora pointed out.
On March 2, U.S. Commerce Secretary Howard Lutnick confirmed that tariffs on Canada and Mexico will take effect on March 4, but President Trump has yet to decide whether to stick with the planned 25 percent level. Meanwhile, India’s trade minister Piyush Goyal has begun a trip to the United States to pursue trade negotiations, with weeks to go before Trump’s proposed reciprocal tariffs take shape.
During Prime Minister Narendra Modi’s visit to the U.S. last month, both nations agreed to finalize the first segment of a trade deal by fall 2025, with an ambitious goal of reaching $500 billion in bilateral trade by 2030.
The broader market displayed a mixed trend, with the BSE Midcap index remaining rising 0.3 percent while the BSE Smallcap index declined 0.7 percent.
Among sectoral indices, Nifty IT rose 0.8 percent as brokerage commentary turned positive after Salesforce guided for 7-8 percent growth in FY26.
Nifty Oil & Gas shed over 1 percent, dragged down by RIL, ONGC, and IGL. Reliance Industries, the second-heaviest stock on the benchmark indices, fell 3 percent to a 16-month low. Bloomberg reported that Reliance New Energy risks a fine due to delays in setting up a battery cell plant.
On the Nifty 50, the biggest losers were HDFC Bank, Bajaj Finserv, RIL, Coal India, and Bajaj Auto which declined almost 2 percent. Meanwhile, BPCL, JSW Steel, Eicher Motors, Grasim, and BEL emerged as the top gainers, climbing 2-5 percent.
Shares of Coal India tumbled over 2 percent as its February business update indicated a decline in production, hurting investor sentiment. Meanwhile, Coffee Day Enterprises surged 20 percent after the NCLAT Chennai bench dismissed a bankruptcy plea filed by IDBI Trusteeship over a Rs 228 crore default.
Vatsal Bhuva, Technical Analyst at LKP Securities sees the immediate resistance for Nifty at 22,300, and the key support at 22,000. "If this support is breached on a closing basis, the next support lies at 21,800."
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