February was a tough month for Indian stocks. The Sensex, a major stock index, dropped over 4,000 points, which is a 5% loss. That’s a huge blow, and the total value of all companies listed on the Bombay Stock Exchange (BSE) fell by more than Rs 40 lakh crore in just one month.
The Nifty index, another big player, had its longest monthly losing streak since it started in 1996. It lost money for five straight months. Since reaching its highest point last September, both the Nifty and Sensex have dropped about 15%. Smaller indexes like the Nifty Next 50 and Nifty Midcap 150 dropped even more, by 26% and 21%, respectively. Even smaller companies faced tough times, with drops of 26-27%.
Although the Nifty hasn’t officially entered a bear market yet, 30 out of its 50 stocks are already struggling, with big drops in names like Tata Motors, Adani Enterprises, Trent, and Hero MotoCorp—each down over 40% from their peaks.
A big reason for this sell-off is that foreign investors are pulling their money out. So far in 2025, they’ve sold $12.2 billion worth of Indian stocks after selling $12.3 billion in the last quarter of 2024.
Dr. V K Vijayakumar from Geojit Financial Services pointed to global issues like trade wars as causes for the market panic. He explained how trade tariffs announced by President Trump were causing uncertainty that affected the stock market.
On the other hand, Chris Wood, an expert from Jefferies, believes this drop is more about technical issues instead of serious economic problems. He thinks the sell-off is due to adjustments in stock values, rather than a major economic crisis.
According to Merisis, the big sell-off seems to be slowing down, mainly focusing now on the top-performing Nifty and Nifty 100 stocks. They think this might be the beginning of recovery, with possible positive movements in the next 4 to 6 weeks.
Amidst all this chaos, some investors still see good signs. Alok Agarwal from Alchemy Capital Management mentioned that company earnings have improved compared to earlier quarters. He noted that even if the earnings reports aren’t fabulous, they’re better than they’ve been in a while. He mentioned that the Reserve Bank of India (RBI) is actively trying to support the economy.
Investors are currently in a tricky spot. Some experts worry that there could be more drops if overall economic data gets worse. Others feel a bounce back is possible soon. The next few months will be key to seeing if this downturn will continue or if the market will stabilize in hopes of a recovery. Manish Jain from Mirae Asset advises investors to be cautious and not to jump in quickly until things look better.
Disclaimer: The views and opinions in this article are those of the experts and do not reflect the opinions of NiftyStat.
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