Market Recap: A Tough Day for Indian EquitiesIndian stock markets ended lower on March 4, as escalating U.S. tariffs on key trading partners—China, Canada, and Mexico—rattled global markets and dampened investor sentiment. The Sensex fell for the third consecutive session, while the Nifty 50 extended its losing streak to ten sessions, marking its longest decline since its inception nearly three decades ago.
At close, the Sensex declined by 96 points (0.1%) to 72,989, while the Nifty dropped 36 points (0.2%) to 22,082. The broader market showed mixed trends, with 2,133 stocks advancing, 1,673 declining, and 118 remaining unchanged.
U.S. Tariffs and Global Market JittersThe U.S. recently imposed a 25% tariff on imports from Canada and Mexico, while Chinese goods now face a cumulative 20% duty, following an additional 10% levy. The situation is expected to escalate further, with reciprocal tariffs from affected nations set to take effect from April 2.
These tariffs could increase inflation in the U.S., potentially prompting the Federal Reserve to maintain higher interest rates for longer—a move that may reduce foreign investment in emerging markets, including India.
Ajit Mishra, SVP of Research at Religare Broking, commented, “The 21,800-22,000 zone holds crucial support for the Nifty. However, persistent global uncertainties, continuous foreign fund outflows, and negative sentiment are dragging the market lower.”
Mishra noted that retaliatory measures from affected nations and global market reactions will be key in determining near-term movements.
Sectoral & Stock Performance: IT, Auto Drag the MarketAmong the 13 Nifty sectoral indices, five closed in negative territory, with IT, auto, and FMCG stocks leading the declines.
IT stocks, which derive a significant portion of their revenue from the U.S., fell nearly 1% as rising inflation concerns hurt investor confidence. Infosys and HCLTech were among the biggest laggards.
The top losers in the Nifty 50 included Bajaj Auto, Hero MotoCorp, Bajaj Finserv, HCLTech, and Eicher Motors, which saw declines of 2-5%.
On the flip side, BPCL, SBI, BEL, Shriram Finance, and Adani Enterprises emerged as top gainers, rising 1-3%.
SBI surged 3% after global brokerage Citi upgraded its rating from’sell’ to ‘buy,’ raising its price target to Rs 830 from Rs 720, signaling a potential 20% upside.
Mid & Small Caps: Mixed Performance Amid Profit BookingThe broader markets showed a divergent trend:
BSE Midcap remained flat
BSE Smallcap surged over 1%
Abhishek Jaiswal, Fund Manager at Finavenue, explained, “The recent decline in small and midcap stocks reflects profit booking after a strong rally, compounded by global uncertainties. However, quality midcap companies remain well-positioned, backed by India’s strong economic growth and structural reforms.”
He added that small-cap earnings have grown by 19.6% over the past five years, while price appreciation has been 26.3%. The recent correction has helped remove excess froth from valuations, setting the stage for future growth.
Key Stock Moves:
ASK Automotive hit a 5% upper circuit after announcing a strategic partnership with Japan’s Kyushu Yanagawa Seiki to manufacture alloy wheels for two-wheelers.
HBL Engineering rose 3% after securing a Rs 148 crore Letter of Award (LoA) from the Bhopal Division of West Central Railway.
Gensol Engineering tumbled 20% after CARE Ratings downgraded its long-term and short-term bank facilities due to financial concerns.
Foreign & Domestic Institutional FlowsOn the first trading session of March:
Foreign Institutional Investors (FIIs) net-sold Indian equities worth Rs 4,788 crore.
Domestic Institutional Investors (DIIs) net purchased shares worth Rs 8,553 crore.
Despite selling pressure from foreign investors, DIIs continued to support the market, helping limit losses.
Outlook: Can Nifty Rebound?With global uncertainties still looming, market participants are closely watching key levels. Analysts believe the 21,800-22,000 range is crucial for Nifty, and a break below could lead to further downside.
“The next few sessions will be critical,” Mishra said. “Investors should focus on quality stocks with strong fundamentals rather than reacting to short-term market noise.”
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a professional advisor before making investment decisions. The stock market is subject to risks, and past performance does not guarantee future results.
