Weekly Market Pulse - Monday, 17th Feb

Markets Under Pressure: Key Lessons from Last Week & What to Watch This Week

Market Recap (What Happened This Week?)

The Indian stock market had a weak and uncertain week. Both Nifty 50 and Sensex ended lower, reacting to global concerns, inflation, and mixed earnings reports.

• Nifty 50 lost 0.44% in one week and closed at 22,929.25.

• Sensex fell 0.26%, ending at 75,939.21.

The market started the week on a strong note, but mid-week selling pressure erased the gains. Investors became cautious after U.S. trade tensions increased and India’s inflation data was higher than expected.

• Banking and financial stocks remained strong, with some private banks making gains.

• Small-cap stocks were hit hard, losing over 4% in a week.

• Export-driven stocks like IT and Pharma struggled as trade concerns grew.

What caused the market to fall?

• Global trade worries: U.S. trade policies affected investor confidence.

• Higher inflation in India: CPI inflation rose to 5.6%, making investors think RBI may not cut interest rates again soon.

• Weakness in small-cap stocks: Retail investors faced losses as mid- and small-cap stocks dropped.

• Energy sector slowdown: Stocks like NTPC (-2.18%) and ONGC (-1.85%) fell as crude oil prices weakened.

Despite these factors, some large-cap stocks performed well, showing that investors still have faith in strong businesses.

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Key Highlights (Changes in 1 Week)

1. Market Drops but Banking Stocks Hold Firm

   • Nifty and Sensex fell, but ICICI Bank (+0.80%) and Kotak Mahindra Bank (+1.46%) gained, keeping the financial sector stable.

2. Small-Cap Stocks Continue to Fall

   • Small-cap stocks lost another 4% this week, making retail investors worried.

3. Energy Stocks Drop Due to Crude Oil Weakness

   • NTPC (-2.18%) and ONGC (-1.85%) faced selling pressure as crude oil prices remained low.

4. Export Stocks Hit by Global Trade Issues

   • IT, Pharma, and Auto stocks struggled as global trade tensions rose.

5. Nestlé India and Bharti Airtel Show Strength

   • Nestlé (+1.11%) gained due to strong demand.

   • Bharti Airtel (+1.05%) benefited from 5G expansion and rising revenue per user.

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Notable Stock Movements (1 Week Changes)

• Adani Ports (-4.41%): Dropped due to trade worries and regulatory uncertainty.

• Tata Steel (-1.32%): Declined due to falling global steel prices.

• Mahindra & Mahindra (-1.26%): Fell despite strong auto sales numbers.

• Nestlé India (+1.11%): Gained due to strong FMCG demand and better earnings.

• Bharti Airtel (+1.05%): Rose due to growing 5G investments and higher revenue per user.

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Looking Ahead (February 17 – February 21, 2025)

1. Big Companies Announce Quarterly Results

   • Earnings reports from HDFC Bank, Hindustan Unilever, and Infosys will affect market movements.

   • If results are better than expected, stocks may rise. If weak, there could be more selling.

2. New IPOs in Focus

   • Ajax Engineering and Hexaware Technologies are launching their IPOs.

   • Market mood will decide if IPOs get good demand.

3. Global Events to Watch

   • U.S. Federal Reserve Minutes (Feb 21): Could give clues about future interest rate cuts.

   • China’s GDP Data (Feb 19): Will impact commodity stocks in India, especially metals and energy.

4. India’s Flash PMI Data (Feb 23)

   • This will show how manufacturing and services businesses are performing in India.

   • A strong reading could boost market confidence.

5. Sectors to Watch

   • IT & Pharma: Could stay weak due to global trade tensions.

   • Banking & NBFCs: Loan growth and RBI’s next move will be key.

   • Auto & FMCG: Demand trends will be watched for growth signs.

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Market Outlook (What to Expect Next Week?)

The stock market may remain volatile as global and domestic factors continue to play a role.

• Banking and financial stocks may stay strong, as interest rates are still favorable for lenders.

• Small-cap stocks could continue to struggle, as investors avoid risky bets.

• Global trade news will affect IT, Pharma, and Auto stocks, which depend on international markets.

• Investors will closely watch inflation trends, as rising prices may make RBI rethink further rate cuts.

What should investors do?

• Stay focused on strong companies: Large-cap and fundamentally strong stocks may perform better.

• Avoid high-risk small-caps for now: Until stability returns, mid- and small-cap stocks may remain weak.

• Watch earnings results closely: Stocks will move based on how companies perform in this quarter’s earnings.

The next week will be important as earnings reports, IPOs, and global news will set the market direction.

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Final Thoughts

The Indian stock market remains uncertain, with many factors influencing movements. It’s a time to be cautious but alert for opportunities. As always, staying informed helps in making better investment decisions.

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