Sensex recovers 600 pts from day's low, Nifty reclaims 23k amid broad-based buying

Sensex recovers 600 pts from day's low, Nifty reclaims 23k amid broad-based buying

Sensex and Nifty staged a sharp recovery from their intraday lows around noon on February 12, clawing back some losses after trading 1 percent lower in the opening hour. Yet, the shadow of US tariff fears and domestic earnings jitters continued to haunt investors, dragging small-caps into bear market territory. Sensex recovered 600 points from day's low while Nifty reclaimed the 23,000-mark amid broad-based buying.

At 11:48 pm, the Sensex was down 298.16 points or 0.39 percent at 75,995.44, and the Nifty was down 80.90 points or 0.35 percent at 22,990.90. About 1,169 shares advanced, 2,273 shares declined, and 91 shares unchanged.

Trump’s latest tariff tantrum has rattled global markets for days, with his shift from targeted trade battles to blanket import tariffs on steel and aluminum stoking fears of a full-scale trade war. "Trump moving away from targeting specific countries like Mexico, Canada and to a lesser extent China, and moving to import tariffs on steel and aluminium on all countries, has aggravated the concerns," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "The European Union’s declaration that they will retaliate with counter tariffs has raised the probability of a full-blown trade war."

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Vijayakumar didn’t mince words about the consequences. "It is important to understand that President Trump, however powerful he might be, cannot manipulate the laws of economics. When higher tariffs raise the inflation in the US and the Fed responds hawkishly, the US stock market will crash. This will restrain Trump. But it will take some time. Meanwhile, the drama and the volatility in the market will continue."

He suggested that investors could use the current weakness to rebalance their portfolios. "The market is in oversold territory and a pullback is likely, but since FIIs are likely to sell into a rally, the upside is capped."

Foreign Institutional Investors (FIIs) have pulled out Rs 17,129.5 crore from Indian equities so far in February.

With Trump’s fresh tariff strike, fears of a multi-front global trade war, a sliding rupee, lackluster Q3 earnings, a slower-than-expected rate cut cycle, and unrelenting FII outflows, the bears have tightened their grip on Dalal Street.

The carnage has dragged broader markets into bear territory, with mid-cap and small-cap indices nosediving nearly 20 percent from their record highs. The Nifty Smallcap index has tumbled over 20 percent from its December 2024 peak, while the Nifty Midcap has plummeted more than 18 percent from its September high.

Currently, BSE Midcap and BSE Smallcap were down by a percent each.

Also Read | One-year returns of BSE MidCap, SmallCap turn red in dollar terms

Sectoral pain was widespread, with all 13 major indices slipping into the red. Nifty Energy, Oil & Gas, and Realty bore the brunt, sliding 1-2 percent.

Among Nifty’s biggest losers were Bharat Electronics, RIL, Adani Ports, ITC, and Power Grid, each dropping over 2 percent. Meanwhile, Apollo Hospital, Tata Consumer, SBI Life, Bajaj Finserv, and Tech Mahindra defied the gloom, gaining 0.7-1.5 percent.

"On the daily chart, Nifty has formed a bearish candlestick pattern for five consecutive sessions, indicating persistent negative sentiment," said Aakash Shah, Technical Research Analyst at Choice Broking.

He highlighted key resistance at 23,180, noting that a breakout above this level could propel gains towards 23,350 and 23,500. "On the downside, immediate support is placed at 22,970, a crucial level for the monthly trend. A breakdown below this mark could lead to further declines towards 22,775 and 22,500, reinforcing a cautious outlook as Nifty struggles to hold critical support levels."

All eyes are now on the upcoming CPI inflation data from both India and the U.S., as investors look for clues on the next market move. India's consumer inflation is expected to have dropped sharply to a five-month low of 4.6 percent in January due to slowing food price rises, according to a Reuters poll. Lower inflation could provide the Reserve Bank of India with room to address slowing economic growth, which has weighed on corporate earnings and consumption.

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