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The Indian stock market witnessed a turbulent session on February 11, 2025, as benchmark indices extended their losing streak to a fifth consecutive day. Persistent foreign fund outflows, renewed U.S. tariff concerns, and domestic economic jitters combined to create a risk-averse environment. Here’s a detailed breakdown of the day’s performance and what drove the sentiment.
Indices Tumble Over 1%: Sensex and Nifty Hit Multi-Week Lows
The BSE Sensex plummeted by 1,018.20 points (1.32%) to close at 76,293.60, its lowest level in two weeks. Similarly, the NSE Nifty 50 shed 309.80 points (1.32%), settling at 23,071.80. Both indices have now lost nearly 3% over the past five sessions, reflecting mounting investor anxiety over global trade tensions and slowing domestic growth.
Key drivers behind the sell-off included:
- Foreign Institutional Investor (FII) Exodus: Unabated selling by foreign funds amid rising U.S. Treasury yields and tariff uncertainties.
- U.S. Trade Policy Jitters: Fresh tariffs announced by the U.S. reignited fears of a global trade war, spooking investors.
- Mid- and Small-Cap Carnage: The BSE Smallcap index plunged 3.40%, while Midcaps dropped 2.88%, signaling a flight to safety.
Sectoral Deep Dive: Auto, Energy, and FMCG Bear the Brunt
Sectoral indices painted a grim picture, with Nifty Auto leading the losses (-2.33%) due to demand concerns and supply chain disruptions. Other laggards included:
- Nifty Energy (-2.10%): Impacted by Brent crude’s volatility and slowing global demand.
- Nifty FMCG (-1.94%): Consumer goods stocks slumped as inflation worries dented spending optimism.
- Nifty IT (-1.47%): Despite long-term resilience, short-term pressures from rupee appreciation and global tech slowdown weighed on performance.
Bright Spots: Bharti Airtel emerged as the sole Sensex gainer, likely buoyed by sector-specific optimism, while the rupee’s sharp recovery (63 paise gain against USD) offered minor relief to exporters.
Rupee Stages a Comeback: Logs Best Single-Day Gain in 2 Years
In a surprising twist, the Indian rupee surged 63 paise to close at 86.82/USD, marking its steepest single-day rise since 2023. Analysts attributed this to aggressive dollar selling by banks and speculative positioning ahead of RBI interventions. However, forex traders warned that volatility could persist amid geopolitical uncertainties.
Market Breadth Reflects Panic Selling
The broader market sentiment was overwhelmingly negative:
- Declining Stocks: 2,545 stocks fell vs. 308 advances.
- 52-Week Lows: 405 stocks hit fresh lows, underscoring the depth of the sell-off.
- Circuit Limits: 302 stocks locked in lower circuits, indicating intense selling pressure.
Expert Insights: What’s Next for Investors?
Vinod Nair, Head of Research at Geojit Financial Services, highlighted that “domestic growth concerns and stretched valuations in mid- and small-caps are amplifying the downturn”. Meanwhile, the RBI’s recent repo rate cut to 6.25% and plans for liquidity infusion via OMO purchases could offer some stability in the coming sessions.
Key Takeaways for Investors
- Stay Cautious on Mid/Small Caps: High valuations and FII outflows make these segments vulnerable.
- Monitor Global Trade Developments: U.S. tariff policies and crude oil trends will remain critical drivers.
- Currency Dynamics: The rupee’s rebound may cushion export-heavy sectors like IT and Pharma temporarily.
Closing Thoughts
February 11, 2025, will be remembered as a day when global macro fears overpowered domestic resilience. While the rupee’s recovery and RBI’s liquidity measures provide a silver lining, investors should brace for continued volatility. As the market digests these headwinds, a focus on fundamentally strong large-caps and defensive sectors like utilities or healthcare might offer safer harbors.
