Nifty Marks Historic Five-Month Losing Streak – What’s Next?

February 2025 ended on a historic bearish note for the Indian equity markets, as the Nifty 50 posted negative returns for the fifth consecutive month, a rare occurrence not seen in the last 29 years. The last time such a prolonged downturn was observed was in July and November 1996, with a significant 8.68% drop in November 1996, driven by liquidity concerns, high interest rates, and weak corporate earnings—factors that continue to influence the current market sentiment.

📊 Institutional Activity

• Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth ₹47,349 crore, extending their selling spree.

• Domestic Institutional Investors (DIIs) stepped in as net buyers, purchasing ₹52,544 crore, providing some stability to the markets.

📉 Sectoral Performance – February Wrap-Up

✔ Sectors Showing Resilience:

• Private Banks ended close to flat, showing some stability amid a weak broader market.

❌ Worst Performing Sectors:

• Realty, Energy, Media, IT, and FMCG stocks faced sharp declines, pressured by macroeconomic concerns and weak earnings outlooks.

🌎 Key Global Developments to Watch This Week

1️⃣ Trade Tariffs & Global Trade Tensions:

• The potential implementation of a 25% tariff on imports from Mexico and Canada, along with an additional 10% tariff on Chinese goods, could have far-reaching implications for global supply chains and emerging markets.

2️⃣ Geopolitical Uncertainty:

• Markets will closely track developments in Ukraine, Europe, Russia, and China, given their potential impact on global commodity prices and risk sentiment.

3️⃣ Currency & FII Selling:

• USD/INR hitting record highs could influence foreign inflows and corporate earnings, especially for export-driven sectors.

4️⃣ Economic Data Releases:

• Manufacturing PMI data from key economies including the US, Eurozone, China, and India will set the tone for global growth expectations.

📈 Positive Domestic Factors

🔹 GST collections continue to show strong growth, indicating resilience in India’s consumption and compliance landscape.

🔹 Auto sales in February were impressive, reflecting strong demand despite rising input costs.

🔹 RBI rate cut expected in April, which could provide relief to interest rate-sensitive sectors.

🔹 Potential export opportunities for India—higher tariffs on Chinese goods in the US could create a window for Indian manufacturers to gain market share at competitive prices.

🔹 Above-average temperatures forecasted for March, which may boost demand in sectors like air conditioners (ACs) and cooling solutions.

📌 Sectors to Watch in the Coming Week

✔ Pharmaceuticals – Defensive play amid market volatility.

✔ NBFCs – Benefiting from potential RBI rate cuts and liquidity support.

✔ Air Conditioners & Cooling Solutions – Rising temperatures could drive sales momentum.

📉 Market Outlook & Strategy

The technical outlook remains weak, with significant downside pressure visible on Nifty. Tax-related liquidation pressure in March could add further volatility.

📌 Investment Strategy:

• A patient and disciplined investment approach is crucial in navigating this market phase.

• Investors should focus on quality stocks with strong fundamentals while avoiding overexposure to volatile sectors.

📅 Global Economic Calendar – Key Events to Watch

Date Event Region

March 4 Manufacturing PMI US, Eurozone, India, China

March 5 US Non-Farm Payroll Data US

March 6 European Central Bank (ECB) Meeting Eurozone

March 7 China Trade Balance Data China

March 8 US Unemployment Rate US

📺 Watch our YouTube video for in-depth technical analysis and key market insights for the coming week.

Stay tuned with Angeeras Securities for professional market updates and expert guidance.