The Indian stock market wrapped up Tuesday's trading session on a flat note, managing to hold its ground despite weak global sentiment. Concerns over a slowdown in the US economy grew after US President Donald Trump did not rule out a potential recession, citing ongoing US tariffs.
Markets started on a shaky footing, mirroring the weak performance of Asian counterparts. However, domestic equities recovered lost ground later in the day, with analysts suggesting that most stocks have already factored in global uncertainties. Some believe the recent correction in the Indian market has reduced the impact of global market movements.
The Nifty 50 edged up by 0.17% to close at 22,499, while the Sensex slipped slightly by 0.02% to end at 74,102.56. Broader market indices showed a mixed trend—Nifty Midcap 100 gained 0.67% to reach 48,762, while Nifty Smallcap 100 dropped 0.80% to 15,076.
Global brokerage firm Morgan Stanley expects Indian equities to recover in 2025, shifting towards a stock pickers’ market rather than being influenced by macroeconomic factors. Meanwhile, Jefferies pointed out that India tends to outperform other emerging markets within 90–180 days after a phase of underperformance.
One of the biggest shocks of the day came from IndusInd Bank, which saw a dramatic 27% plunge in its share price. The fall followed the bank’s disclosure of accounting discrepancies in its derivative positions related to foreign currency deposits and borrowings. This miscalculation is expected to dent the bank’s net worth by 2.35%, translating to a post-tax impact of around ₹1,500-1,600 crore.
The selloff wiped out ₹18,000 crore in market capitalisation, hitting mutual funds, retail investors, and major stakeholders. Mutual funds collectively lost around ₹5,455 crore, while retail investors saw a combined loss of ₹2,916 crore. LIC, which holds a 5.23% stake in the bank, also faced a setback of ₹965 crore.
IT stocks bore the brunt of recession fears in the US, with the Nifty IT index tumbling 1.44%. Several major IT firms rely heavily on the US for revenue, and weak economic indicators from across the Pacific have spurred a wave of selloffs. Other sectors, including banking, auto, media, consumer durables, and PSU banks, also ended lower, with losses ranging from 0.12% to 1.36%.
However, realty stocks staged a comeback, with the Nifty Realty index jumping 2.36%. Oil & gas and pharma stocks also managed to close in positive territory, defying broader market weakness.
Despite global concerns, Indian markets have shown resilience. Falling crude oil prices, a softer dollar index, and expectations of a rebound in domestic earnings have provided some cushion. Vinod Nair, Head of Research at Geojit Financial Services, noted that while global cues remain shaky, domestic valuations have moderated, bringing stability.
From a technical standpoint, Rupak De, Senior Technical Analyst at LKP Securities, sees potential upside for the Nifty. The index closing above its 50 EMA on the hourly chart indicates positive momentum, with a possible rise towards 22,660–22,700. If Nifty surpasses 22,700, a move towards 23,000 could be on the cards, while strong support lies at 22,400.
(By arrangement with livemint.com)
