Indian Stock Market Analysis: March 4, 2025 - Navigating Global Headwinds

On March 4, 2025, the Indian equity markets experienced a predominantly negative trading session, influenced by escalating global trade tensions and geopolitical uncertainties. The Sensex closed down 96.01 points at 72,989.93, a decline of 0.13%, while the Nifty 50 registered a loss of 36.65 points, settling at 22,082.65, down 0.17%. Earlier in the day, the indices saw steeper declines, reflecting broader market anxieties.

Key Market Drivers and Influences

Several factors contributed to the cautious sentiment in the market:

• Global Trade Tensions: New tariffs announced by the United States on goods from Canada, Mexico, and China created significant global market apprehension. These tariffs, ranging from 25% on Canada and Mexico to an additional 20% on China, led to sharp declines in major Wall Street indices and Asian markets, including a 1.2% drop in Japan's Nikkei.
• Geopolitical Concerns: Lingering geopolitical tensions, particularly between Russia and Ukraine, added to the prevailing uncertainty.
• Foreign Institutional Investor (FII) Activity: Worries surrounding potential FII selling further weighed on investor sentiment.

Economic Data and Earnings Outlook

• Manufacturing PMI: India's manufacturing Purchasing Managers' Index (PMI) for February 2025 fell to a 14-month low of 56.3. While the index remains above 50, indicating expansion, the slowdown in new orders and production suggests weakening momentum.
• Corporate Earnings: The Profit After Tax (PAT) growth for Nifty-50 companies during the first nine months of FY25 was a disappointing 4%. This performance raises concerns about FY26 earnings expectations and underscores the importance of rigorous financial analysis.

Sectoral Performance and Individual Stock Movements

Sectoral performance was mixed, with 19 out of 30 Sensex constituents ending in negative territory. However, specific stocks showed resilience:

• Advancers: SBI shares surged nearly 3% following a double upgrade to 'buy' from Citi, highlighting the impact of analyst sentiment. Zomato also trended positively.
• Losers: Bajaj Auto experienced a notable decline of 5%. The Nifty IT index slid over 1%, reflecting broader sector pressures.
• Specific Stock Activity:
  • RBL Bank shares fell 3% after tax authorities raided three of its offices.
  • ASK Automotive locked at a 5% upper circuit after announcing a technical assistance agreement with Japan's Kyushu Yanagawa Seiki Co Ltd.
  • Coffee Day Enterprises stock continued its upward trajectory, rising over 20% for a second consecutive day on positive news from the National Company Law Appellate Tribunal.
  • Indian defence stocks saw a surge, driven by optimism surrounding increased European military spending.

Bond Markets and Currency

• Rupee: The Indian rupee depreciated by 8 paise against the US dollar, closing at 87.40.
• Bond Yields: Indian government bond yields saw a slight decline, mirroring a trend in US Treasury yields. However, yields were capped by the substantial supply of state debt.

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Disclaimer: This analysis is for educational purposes only and does not constitute investment advice. Securities mentioned are not recommendations.