Sensex Snaps 5-Day Losing Streak; Rupee Hits Two-Week Low

Highlights 

• Tata Investment soars 7% after Tata Capital board approves its Initial Public Offer.
• PSU Bank shares—UCO Bank, Indian Overseas Bank, Central Bank of India, Punjab & Sind Bank—give up gains after rising up to 4% on divestment reports. 
• Nestle India climbs higher on plans to consider a price hike to counter rising input costs.
• Axis Bank is reportedly weighing a $1 billion majority stake sale in Axis Finance.
• HSBC flags concerns over potential EV policy changes, seeing headwinds for Indian automakers.
• SEBI proposes fresh measures to tighten derivative trading norms including fewer stocks in F&O ban. 
• RBI eases risk weights for bank lending To NBFCs
• Bitcoin falls 7%, drops below $89,000 for the first time in 3 months. 

The BSE Sensex halted a five-session losing streak, while the Nifty closed largely flat as gains in financial and auto stocks offset weakness in metals. US tariff threats and a sharp rupee slide kept investors jittery in a truncated week, ahead of monthly expiry.

Sectoral Performance
 - Losers: IT, metals, oil & gas, energy, capital goods, PSU banks, and realty fell 0.5%-1.5%.

 - Gainers: Auto, consumer durables, FMCG, and media gained 0.5%-0.8%.

The 10-year government bond yield remained steady as state bond auction cut-offs met market expectations, while shorter-duration yields fell on RBI’s liquidity measures.

Seventeen states raised ₹410.54 billion through bonds maturing in 5 to 30 years.

Traders expect the RBI’s FX swap auction to boost rupee liquidity for up to three years, supporting demand for shorter-tenure bonds. However, longer-duration yields saw limited demand, as swap auction reduces the need for bond purchases via open market operations.

On Friday, the RBI had announced a $10 billion long-term dollar/rupee buy-sell swap auction for three years to inject rupee liquidity.

The Indian rupee slid 50 paise to 87.20 against the dollar, its steepest intraday drop since February 3, weighed down by weaker Asian currencies and US tariff concerns. Month-end importer demand further pressured the currency. 

The RBI likely intervened after the rupee fell past 87 per dollar, selling dollars via PSU banks around 87.20-87.24. 

Outlook: With global uncertainties looming and FII selling pressure persisting, markets may remain rangebound. Weak sentiment ahead of the monthly expiry is keeping investors cautious.

Key Drivers:

• Investors will watch out for Nvidia’s first earnings since DeepSeek shook up the genAI ecosystem. The stock is down 7.8% over 5 sessions. 
• Rupee weakness and continued FPI selling could further weigh on sentiment. Foreign investors have offloaded $3.1 billion worth of Indian equities in February.
• The rupee is likely to stay volatile, trading in the 86.65-87.70 range.

EVENTS AND DATA TO WATCH ON THURSDAY

• Indian market is shut on Wednesday for Mahashivratri 
• Germany February GFK consumer climate survey
• US October-December 2nd GDP estimate 
• US unemployment insurance weekly claims report
• US President Donald Trump hosts UK Prime Minister Keir Starmer at the White House

CORPORATE ACTION ON THURSDAY 

• Utkarsh Small Finance Bank board meets to consider a fund raise

OTHER EVENTS TO WATCH 

• The month-long Mahakumbh festival ends