Sensex falls over 200 pts, Nifty tests 25,700 as metal, auto stocks lead decline; IT bucks trend

Benchmark indices Nifty and Sensex opened the session sharply lower on Tuesday after metal and auto stocks dragged the frontline indices lower. Following its massive selloff in the previous week, IT index rose over 0.5% to become the best sectoral gainer at the open.

At 9:15 am, Sensex traded over 200 points lower at 83,055, while the 50-share Nifty index began trading over 70 points in the red at 25,638 or 0.2% lower.

On the 30-share Sensex, Eternal, Tata Steel, UltraTech, Reliance Industries, Trent, and ICICI Bank were the biggest laggards, falling up to 2.2% in the morning. On the flipside, Asian Paints, Infosys, BEL, Tech Mahindra, and TCS rallied up to 2%.

Expert Views

V K Vijayakumar, Chief Investment Strategist at Geojit, said that despite the recent sell-off in capital market-related stocks following the RBI’s tighter rules on loans to proprietary traders and brokers, the Nifty surged 211 points in the previous session, underscoring the market’s underlying resilience.

He attributed this strength to improving macroeconomic fundamentals in India and their positive implications for corporate earnings. The 14.7% growth in corporate earnings reported in Q3 was better than expected, and the momentum is likely to continue in Q4, with further acceleration projected in FY27. According to him, foreign institutional investors (FIIs) are unlikely to ignore this trend and could turn significant buyers in India, despite intermittent selling triggered by events such as the AI-driven shock to IT stocks.

Global Markets

Asian financial markets traded cautiously on Tuesday in holiday-thinned conditions, while oil prices edged higher ahead of U.S.–Iran nuclear negotiations scheduled to begin later in Geneva. Activity remained subdued as markets in Mainland China, Hong Kong, Singapore, Taiwan and South Korea were closed for the Lunar New Year holidays, while U.S. markets were shut on Monday for Presidents’ Day.

In Japan, the Nikkei 225 declined 0.5%, while the broader Topix slipped 0.2% to 3,779.29. In Australia, the S&P/ASX 200 traded nearly 0.5% higher.

U.S. stock futures were little changed on Monday night after two consecutive negative weeks for Wall Street. Futures linked to the S&P 500 rose 0.1%, while Nasdaq 100 futures fell 0.2%. Dow Jones Industrial Average futures gained 76 points, or 0.2%. The New York Stock Exchange remained closed on Monday in observance of Presidents’ Day.

FII/DII Tracker

Foreign portfolio investors or FPIs net sold shares worth Rs 972 crore on Monday, February 16. DIIs were buyers of equity worth Rs 1,667 crore, provisional data from the National Stock Exchange showed.

Crude Impact

Oil prices were steady on Tuesday as investors weighed the risk of potential supply disruptions after Iran conducted naval drills near the Strait of Hormuz ahead of nuclear talks with the United States scheduled later in the day.

U.S. President Donald Trump said on Monday he would be involved “indirectly” in the talks in Geneva, adding that he believes Tehran wants to reach a deal. Over the weekend, Trump also said that regime change in Iran “would be the best thing that could happen.”

Brent crude futures slipped 0.2% to $68.59 a barrel by 0106 GMT, following a 1.3% gain in the previous session. U.S. West Texas Intermediate (WTI) crude stood at $63.73 a barrel, up 84 cents or 1.34%. However, the move reflected the previous session’s price action, as the contract did not settle on Monday due to the U.S. Presidents Day holiday.

Rupee vs Dollar

The Indian rupee opened 0.04% lower at 90.69 against the U.S. dollar on Tuesday, compared with its previous close of 90.65.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)