Equity markets opened on a cautious note Tuesday morning, showing mixed signals as the Sensex opened at 74,440.30 compared to its previous close of 74,454.41, and is currently trading at 74,757.22, up by 302.81 points or 0.41 per cent. Similarly, the Nifty opened at 22,516.45 against its previous close of 22,553.35 and is now at 22,612.25, gaining 58.90 points or 0.26 per cent, despite pessimism in global markets and concerns over impending Trump tariffs.
The market’s attempt at recovery comes after Monday’s sharp sell-off that saw the Sensex plunge 857 points and Nifty drop 243 points, with the IT and digital indices experiencing significant declines of over 2 per cent. Today’s modest gains contrast with the overall bearish sentiment that has persisted for nearly two weeks.
“The market is oversold, largecap valuations are fair and short positions in the market are high. This warrants a bounce,- back, particularly if a short covering happens,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “But the real issue is the relentless FII selling in the cash market, which has touched ₹43,200 crore in February so far.”
Foreign Institutional Investors (FIIs) continued their selling streak, offloading equities worth ₹6,286 crore on February 24, adding to concerns as they’ve sold more than ₹3 lakh crore from October 2024 to February 2025. Meanwhile, Domestic Institutional Investors (DIIs) acquired equities worth ₹5,185 crore, partially offsetting the foreign outflows.
Auto and financial stocks led today’s early gains, with Mahindra & Mahindra emerging the top performer, up 2.38 per cent, followed by Bajaj Finserv (1.99 per cent), Bharti Airtel (1.35 per cent), Bajaj Finance (1.32 per cent), and Adani Ports (1.25 per cent). Metal stocks faced pressure, with Hindalco dropping 2.65 per cent to lead the losers, followed by Coal India (-1.26 per cent), Larsen & Toubro (-1.03 per cent), Sun Pharma (-0.99 per cent), and Hero MotoCorp (-0.98 per cent).
Market analysts attribute the cautious sentiment to multiple factors, including President Trump’s decision to proceed with scheduled tariffs on Canada and Mexico. “While the street fears that stagflation could return in the US, the Trump tariffs set to begin from April 2, could disrupt global trade and trigger retaliatory tariffs,” warned Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Global markets also reflected this uncertainty, with Asian markets falling by up to 2 per cent and US markets closing mixed overnight. The Nasdaq Composite dropped 1.2 per cent due to declines in technology stocks ahead of Nvidia’s results announcement, expected Wednesday.
Technical analysts view current market levels as critical support zones. “The level of 22650/74900 will act as a trend decider. As long as the market trades below the same, weak sentiment is likely to continue,” noted Shrikant Chouhan, Head of Equity Research at Kotak Securities.
Vikas Jain, Head of Research at Reliance Securities, said Nifty is approaching its longest losing streak in 28 years, and is on track for a potential fifth consecutive monthly decline, a situation last seen in 1996. “Nifty-50 has witnessed a vertical fall over the past 13 days, and we expect some bounce from the lower range in the second half of the session.”
VLA Ambala, Co-Founder of Stock Market Today, identified technical indicators, suggesting potential for further market dips. “The index formed a high wave doji candlestick pattern on the technical chart, with its RSI reading standing at 29 on the daily, 37 on the weekly, and 55 on the monthly frame,” Ambala noted. She added that concerns about global trade wars and AI disruptions could hamper economic progress, but expects the Nifty to find support between 22,350 and 22,200 levels.
Hardik Matalia, Derivative Analyst at Choice Broking, advised traders to exercise caution given the current market dynamics. “On the daily chart, Nifty formed a bearish candlestick pattern, indicating the possibility of further downside,” Matalia observed. He identified immediate resistance at 22,650 and 22,800, with key support levels at 22,400 and 22,125, suggesting that traders should wait for confirmation of price action at critical levels before initiating fresh positions.
Sameet Chavan, Head Research, Technical and Derivative at Angel One, highlighted the breakdown of the falling wedge pattern in the benchmark index. “This breakdown indicates a notable disruption in the structural framework of the market, pointing to dampened sentiment,” Chavan explained. He emphasised that the support level at 22500-22400 has become increasingly critical for the Nifty50 index in the immediate future, while a bearish gap at 22670-22720 could present significant resistance to any recovery attempts.
Ameya Ranadive, Sr Technical Analyst at StoxBox, pointed to global factors affecting market sentiment. “The absence of significant US economic data may have contributed to choppy trading ahead of the Federal Reserve’s preferred inflation readings released on Friday,” Ranadive stated. He noted that derivatives data indicates a bearish sentiment, characterised by significant call writing at 23,000 and 22,800, reinforcing strong resistance levels, while substantial put writing at 22,500 underscores key lower support.
The commodity markets showed gold trading near record highs at around $2,940 an ounce, while Brent crude held relatively steady at $74.4 per barrel.
Looking ahead, market volatility is expected to intensify with the February series F&O expiry scheduled for Thursday. “Investors should stay with quality stocks, which will bounce back when the inevitable recovery happens. Patience is the key,” advised Dr. Vijayakumar.
