Sensex declines 1%, Nifty50 falls nearly 2% in February

At close, Sensex was down 326.23 points, or 0.55 per cent, at 58,962.12, and Nifty ended the day at 17,303.95, down 88.75 points, or 0.51 per cent. In the last eight sessions, Sensex has dropped 3.8 per cent while the Nifty has fallen 4 per cent.

“Markets extended losses for yet another session and settled with a cut of nearly half a percent. The tone was positive initially but selling resumed as the session progressed. Consequently, Nifty finally settled at 17,303.95 level. On the sectoral front, most sectors traded under pressure however selective buying in auto, and realty pack combined with rebound on broader front kept the the traders busy,” said Ajit Mishra, VP – Technical Research, Religare Broking. 

“Markets are not seeing respite despite the oversold positions however the pace of decline has subsided in the recent sessions. We expect Nifty to respect 17,100-17,200 zone thus possibility of consolidation is high. Meanwhile, focus on stock-specific opportunities based on sectoral trend and limit leveraged positions,” he added.

The month started with the Indian Budget 2023, when the benchmark indices – Nifty and Sensex – closed in the red, and the subdued sentiment continued through the month. It only got worse towards the end of the month when Indian and American central Banks’ policy meeting minutes indicated at higher interest rates for longer approach. In the last week of February, the indices fell below many support levels.

In February, Nifty clocked in a loss of 1.77 percent, while the Sensex shed 1.25 percent.

In the last week of February, Nifty broke its important level of 17,800 on the back of the worries around the sticky US inflation which kept the index moves in check. Furthermore, Nifty retested its intraday low of 17,353, hit on the Budget day; Sensex also breached psychological levels of 60,000 and 59,000.

“Weakness continued to persist on global as well as domestic fronts led by worry over prolonged interest rate cycle. Nifty opened on a flat note on Feb 28 and witnessed continued selling pressure throughout the day to close with a loss of 89 points at 17304 levels. Sectorally, it was mixed bag with Realty being top gainer – up more than 1%,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

“Markets are continuously witnessing selling pressure on back of global uncertainty, consistent FIIs selling and central banks around the world being hawkish to tame rigid inflation. Nifty ended Feb with a loss of 2% – its 3rd consecutive month of decline. Overall cautiousness is likely to remain ahead of key macro data – India’s GDP & US consumer confidence to be released,” Khemka added.

The largest decline was seen in paints, metal, banking and financials stocks while outperformance was seen in technology and auto stocks.

Bank Nifty on Tuesday closed at 4,269.05, down by 0.09 per cent. In February, the index saw a decline of 4.5 per cent. It has declined by around 7.5 per cent in last two series (December 30 – February 23). Global jitters and continued pressure in leading private banks as well as in PSU banks dragged the Bank Nifty lower.

The month of February saw relative lower participation from foreign institutional investors (FIIs). After the outflow of nearly ₹30,000 crore in the month of January, FIIs have bought nearly ₹2,000 crores in secondary markets. At the same time, Domestic Institutions (DIIs) bought ₹45,000 crore in last two months.