Sensex and Nifty fell for the eighth session for the first time in two years on February 14, as fears of relentless FII selling and weak Q3 earnings overshadowed any optimism sparked by easing Russia-Ukraine tensions, a delay in U.S. tariff impositions until April, positive U.S. producer data, and hopes of tariff discussions between Indian Prime Minister Narendra Modi and U.S. President Donald Trump.
At close, the Sensex was down 199 points or 0.3 percent at 75,939, and the Nifty was down 102 points or 0.4 percent at 22,929. About 642 shares advanced, 3,200 shares declined, and 73 shares were unchanged. Nifty is currently 13 percent below its all-time high, while Sensex has declined 12 percent from its peak. Sensex and Nifty fell 3 percent each for the week ended February 14.
Investors remained cautious about the implications of reciprocal U.S. tariffs, despite Modi's offer to discuss easing tariffs, buying more U.S. oil and gas, combat aircraft, and concessions. This followed his meeting with Trump at the White House. Meanwhile, Trump is planning reciprocal tariffs on every country taxing U.S. imports, fueling fears of a global trade war, although the imposition of these duties is likely to be delayed.
The broader markets bore the brunt, with the BSE Midcap and BSE Smallcap indices nosediving nearly over 3 percent each, sharply underperforming the benchmarks. The smallcap index is down around 21 percent from its December record high, while midcaps are 19.5 percent below their peak closing level in September.
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A broad-based selloff in the Indian equity market has dragged the country’s market capitalisation to an eight-month low. The market capitalization of BSE-listed companies dropped below Rs 400 lakh crore for the first time since June 2024.
"The market sentiment is largely driven by foreign institutional investors (FIIs), who have been net sellers since last October," said Gaurang Shah, Senior Vice President at Geojit Financial Services.
In January 2025, FIIs offloaded Indian equities worth Rs 87,374 crore, and so far in February, they have sold shares worth Rs 24,888 crore. Shah expects this selling pressure to persist, noting, "However, the good part is that the selling pressure from FIIs is relatively lower than last year. We’ll have to wait and see when this stops."
On the broader market outlook, Shah pointed out that in small caps, valuations still appear overvalued despite the correction. "Secondly, earnings haven’t caught up with the current market valuations. In the mid-cap space, one needs to be very sector-specific in selecting investments."
All 13 major sectoral indices were in the red, with Nifty Energy, Media, PSU Bank, and Pharma taking the hardest hits, each falling 2-3 percent.
High-weightage financials fell over 1 percent after the Supreme Court dismissed review petitions filed by telecom companies seeking to overturn the earlier order on the calculation of dues. Higher telecom dues increase banks' credit risk exposure to telecom companies.
Among the Nifty 50, Bharat Electronics, Adani Enterprises, Trent, Adani Ports, and Sun Pharma were the biggest losers, tumbling 3-4 percent. Meanwhile, Britannia, ICICI Bank, Nestle, Infosys, and TCS emerged as the top gainers, edging up 0.7-1 percent.
ITI shares fell nearly 5 percent after the state-run telecom product maker reported a net loss of Rs 48.9 crore in the December quarter, compared to a net loss of Rs 101.3 crore in the same period last year. Deepak Nitrite shares plunged 15 percent after reporting a more than 50 percent drop in Q3FY25 net profit to Rs 98 crore from Rs 202 crore a year ago.
Senco Gold tumbled 20 percent, its steepest decline since listing, with the last significant drop of 19 percent occurring in October 2024. Shares of Fertilisers And Chemicals Travancore plunged over 8 percent after the company reported a 74 percent drop in net profit to Rs 8 crore from Rs 30.3 crore a year ago.
Shares of Heranba Industries tumbled 10 percent after the company posted a net loss of Rs 10.2 crore, compared to a profit of Rs 14 crore in the same period last year.
Mehul Kothari, Assistant Vice-President of Technical Research at Anand Rathi Share and Stock Brokers, noted that a decisive close below 22,800 on the Nifty for a few days could trigger a sharp decline of 500 to 1,000 points—500 points on the conservative side and up to 1,000 points in a more aggressive scenario.
However, he added, "If Nifty holds above 22,800, we might see a relief rally of 200 to 500 points in the upcoming sessions."
Should Nifty break below 22,800, Kothari said that the next support levels would be at 22,500 and 22,000. On the upside, resistance is seen at 23,000, with a stronger hurdle at 23,200.
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