IT, Auto Stocks Drag Nifty 50 To Its Lowest Level Since June 2024 

Highlights 
•    India's GDP grows 6.2% in Q3; economy seen expanding at 6.5% in 2024-25
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•    Coal India shares rise subsidiary announces additional levy on coal dispatches
•    IT companies fall due to concerns over Trump tariffs, slowing US economy
•    IREDA shares slump over 7% as it enters F&O segment; stock down 50% from peak
•    Granules falls as US FDA issues warning letter after inspection of Gagillapur facility
•    Bitcoin crashes below $80,000 as Trump’s crypto hype fizzles

The Nifty 50 index slumped nearly 2%, or over 400 points, today, dragging the index to its lowest level since June 2024. From its September 2024 peak, the Nifty has corrected nearly 16%. The BSE Sensex also closed 1.9% lower, or 1,414 points down, at 73,198. The sell-off on Wall Street overnight was a key trigger behind the sharp fall in domestic equity indices today.
The Midcap and Smallcap indices had their worst month since March 2020, declining 11% and 13%, respectively, in February. The Nifty Smallcap index is down 25% so far from its December 2024 peak.

 

Sectoral Performance
All sectoral indices ended in the red, posting losses between 1% and 4%. IT, auto and financial stocks accounted for half of Nifty 50’s losses. IT index plunged 4% after US jobless claims data fueled fears of an economic slowdown. This week, the IT index has shed nearly 8%.
Among Nifty 50--M&M, Bharti Airtel, Wipro, Tech Mahindra, and IndusInd Bank were biggest losers, down 5-7%. Meanwhile, Hindalco, Trent, HDFC Bank, and Coal India emerged as top gainers, climbing 0.3-2.0%.

The yield on 10-year government bonds ended higher after a weaker-than-expected demand for the last weekly gilt auction of the current financial year. The yield on benchmark 10-year bond rose 3 basis points in February, after easing 6 bps last month.  
Demand for longer-tenure bonds weakened after the RBI opted to infuse liquidity through a $10 billion FX swap, while market expected the continuation of bond purchases via open market operations.
The Reserve Bank of India's longer-term dollar/rupee buy-sell swap witnessed firm demand with the auction drawing bids 1.6 times the $10 billion notified amount, with the premium cut-off set at 655 paise. 

The Indian rupee slipped almost 30 paise against the US dollar as a slump in domestic equities dented investor sentiments. Elevated dollar index and sustained FII outflows also contributed to the decline in the domestic unit. 
Month-end dollar demand by importers amid uncertainty over US trade tariffs also contributed to the decline in the domestic unit.

Outlook
Indian equities are expected to remain subdued as US President Donald Trump announced additional trade tariffs on China.
Upward revision in India’s 2024-25 GDP growth may support investor sentiment. The second advance estimate for 2024-25 pegged real GDP growth at 6.5% as against 6.4% projected earlier.

Key Drivers:
•    Trump’s meeting with Ukrainian President Zelensky will be in focus for commentary about peace negotiations between Ukraine and Russia.
•    Rupee weakness and continued FPI selling could further weigh on sentiment. likely trading within the 87.00-87.50 range. Foreign investors have offloaded $X.X billion worth of Indian equities in February.

EVENTS AND DATA TO WATCH ON MONDAY
•    HSBC India Manufacturing PMI for February

CORPORATE ACTION ON MONDAY
•    GTT Data Solutions board to consider preferential issue of share
•    RDB Real Estate Constructions    board to consider increase in authorised capital and preferential issue of share 
•    Wherrelz IT Solutions board to consider right issue of equity shares

OTHER EVENTS TO WATCH 
•    Maharashtra, Bihar, and Jharkhand governments to present Budget for FY26.