Stock market sell-off: Sensex crashes 10,800 points from peak; Tata Motors, Asian Paints, IndusInd Bank lead losses | Stock Market News

The Indian stock market continued its downward trajectory for the fourth consecutive session on Friday, weighed down by weak global cues. Benchmark indices, Sensex and Nifty 50, declined over 0.5% on February 21, driven by heavy selling in auto, pharmaceutical, financial, and FMCG stocks.

The 30-share BSE Sensex fell by 560 points to an intraday low of 75,175.97. The index has recorded losses in 12 out of the past 13 sessions, shedding over 3,400 points, or more than 4%, during this period.

Notably, the Sensex has declined 12.5% from its record high of 85,978.25, achieved on September 27, 2024, marking a cumulative drop of 10,802 points. This decline has been attributed to persistent selling by foreign institutional investors (FIIs) since October 2024, as they seek opportunities in more affordable markets.

Additionally, global geopolitical uncertainties, signs of slowing domestic economic growth, and weak corporate earnings have contributed to the market downturn.

The recent threats of higher tariffs by US President Donald Trump on imports have also created volatility in global financial markets.

Market Sentiment Amid Tariff Concerns

“In the context of Trump’s tariff threats the market is negatively responding to potential tariff targets like autos and pharmaceuticals and looking for opportunities in domestic consumption plays which will not be impacted by tariff threats. This is likely to be a short-term trend since Trump’s strategy is to threaten with tariffs and then negotiate for tariff reduction on US exports. It will take time for this to play out,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

He further noted that higher tariffs on imports into the US is not in the interest of the US since it will be inflationary, inviting hawkish comments from the Fed, which, in turn, will impact the US stock market. Trump will not like this outcome and, therefore, he is using the interim period to negotiate with trading partners.

Vijayakumar also expects the FII selling in India to continue, particularly in the context of renewed interest in Chinese stocks which are cheap and are staging a smart recovery.

“FII selling will continue to put pressure on largecaps. This is an opportunity for long-term investors. Select midcaps like in the defence sector which have corrected and are fairly valued now are likely to witness buying since they don’t face the threat of FII selling,” said Vijayakumar.

Key Sensex Constituents Driving the Decline

Several heavyweight stocks have significantly contributed to the Sensex’s downturn in recent months:

Tata Motors: Tata Motors share price has been the worst performer among Sensex constituents, declining over 36% in the past six months and trading 43% below its 52-week high.

Asian Paints: Asian Paints stock price has dropped over 28% in the past six months and is currently down more than 34% from its 52-week high.

Adani Ports & SEZ: The Adani Group stock has delivered negative returns of over 25% in six months and is trading 32% below its 52-week high.

IndusInd Bank: Shares of the private lender have declined 24.55% in six months, down 34% from their 52-week high.

PowerGrid Corporation of India: The PSU stock has fallen 21% over the last six months and is currently 29% below its 52-week high.

With ongoing FII outflows and global uncertainties, market participants are closely monitoring geopolitical developments and corporate earnings for further cues.

Sensex Outlook

On Friday, the Sensex breached the critical technical support level of 75,500, with the next major support now seen at 75,200.

“If the Sensex closes below the crucial support level of 75,200, it could open the downside target of 70,234, which was the low recorded on June 4, 2024—the day of the Lok Sabha election results,” said Anshul Jain, Head of Research at Lakshmishree Investment and Securities.

On the upside, Jain noted that the Sensex may face resistance at its 20-Day Moving Average (DMA) of 76,600. A decisive close above this level could pave the way for the next upside target at the 50-Day Moving Average (DMA), positioned at 77,490.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.