Nifty and Sensex Show Recovery After Early Losses; Pharma Stocks Lead Gains Amid Market Weakness

Nifty and Sensex indices rebounded from early losses, with pharma stocks like Glenmark and Aurobindo Pharma leading the gains. However, the broader markets underperformed, as seen in the sharp declines of the Nifty Smallcap 100 and Midcap 100 indices. Weak market sentiment is driven by FII sell-offs, a depreciating rupee, and concerns over U.S. tariffs.

 

CONTENTS:

• Nifty and Sensex Recover from Early Losses, Pharma Stocks Lead Gains Amid Broader Market Weakness
• Stock Market Update and Trade Setup for Nifty 50 – 17 February 2025
• Stock Market Update: Sensex and Nifty50 Opening Movements – 17 February 2025

Nifty and Sensex Show Recovery After Early Losses; Pharma Stocks Lead Gains Amid Market Weakness

Nifty and Sensex Recover from Early Losses, Pharma Stocks Lead Gains Amid Broader Market Weakness

Nifty and Sensex: The Nifty and Sensex indices are recovering from early losses, with pharma stocks showing positive movement. The broader markets, however, are underperforming, as seen in the sharp declines in the Nifty Smallcap 100 and Nifty Midcap 100 indices, which dropped over 2%. On February 17, the Nifty 50 extended its losing streak to nine sessions, a run last seen in May 2011, while the Sensex dropped by 0.41% to 75,630. The market’s negative sentiment is driven by factors like consistent foreign institutional investor sell-offs, a depreciating rupee, and the imposition of reciprocal tariffs on Indian exports by U.S. President Donald Trump.

There has been a marked decline in the market capitalization of BSE-listed companies, falling below Rs 400 lakh crore for the first time since June 2024. Despite the overall downturn, some sectors are showing signs of recovery, particularly the pharma sector, led by stocks like Glenmark Pharma and Aurobindo Pharma, which rose by up to 5%. Analysts have pointed to a lack of strong domestic triggers and a slowdown in corporate earnings as reasons behind the market’s poor performance. However, positive factors such as easing geopolitical tensions, cooling crude oil prices, and a weaker dollar may provide some support to the market.

The ongoing earnings season has revealed disappointing results, with low single-digit profit growth for the Nifty and BSE500 companies, leading to further downgrades. Geojit Financial Services’ V K Vijayakumar noted that high valuations combined with modest earnings growth were a key driver behind the market’s weakness. He suggested that only an earnings recovery and a softening dollar could reverse the trend. Meanwhile, the performance of banking and IT sectors will play a crucial role in guiding the market in the near term.

Global markets have shown mixed performance, with the U.S. stock markets trading flat, though the Nasdaq Composite posted a modest gain. Economic data from the U.S., especially a significant contraction in retail sales, has put additional pressure on the dollar, fueling speculation that the Federal Reserve might reconsider its interest rate policy.

In the stock space, Mahindra & Mahindra saw its shares drop by 5% despite strong demand for its new electric SUVs, while liquor companies like United Breweries and United Spirits also saw losses after the Indian government reduced tariffs on U.S. bourbon.

 

Stock Market Update and Trade Setup for Nifty 50 – 17 February 2025

Nifty and Sensex: The Nifty 50 index has been on a downward trajectory, with a 2.5% weekly decline ending on February 14. If the Nifty 50 breaches the 22,800 support level, it could drop further to 22,600-22,500. On the flip side, 23,000 is a crucial resistance level; if it holds, a technical bounce-back could push the index up to 23,200-23,300. For the Bank Nifty, the 20-day simple moving average (SMA) of 49,300 will determine its next direction. If it falls below this level, it could retrace to 48,000-47,750. Conversely, if it rises above 49,300, the index may retest levels around 49,800-50,000.

 

Global Market Trends With the earnings season concluded, investors will focus on foreign institutional investor (FII) flows and currency movements. Speculation over U.S. tariffs and their potential global trade impact will also remain important. Domestically, key data releases like HSBC Manufacturing PMI, Composite PMI, and Services PMI will provide further insights.

 

Stock Picks for Today

Sumeet Bagadia’s Recommendations:

1. Bayer CropScience Ltd: Buy at ₹4,490.5, with a stop loss at ₹4,333 and a target price of ₹4,805. The stock has recently rebounded from ₹4,200–₹4,400, showing strong buying interest.
2. Triveni Engineering & Industries Ltd: Buy at ₹370.85, with a stop loss at ₹357 and a target price of ₹399. The stock has formed a bullish candlestick pattern, signaling potential for a breakout and reversal.

 

Shiju Koothupalakkal’s Recommendations: 3. Chalet Hotels Ltd: Buy at ₹693.65, with a stop loss at ₹678 and a target price of ₹735. 4. GlaxoSmithKline Pharmaceuticals Ltd: Buy at ₹2,018, with a stop loss at ₹1,970 and a target price of ₹2,130.

 

Stock Market Update: Sensex and Nifty50 Opening Movements – 17 February 2025

Nifty and Sensex: The Indian equity benchmarks, BSE Sensex and Nifty50, faced a sharp decline in early trading on Monday, with Sensex dropping over 600 points and Nifty50 falling below 22,750. However, both indices managed to recover slightly later. As of 9:22 AM, the BSE Sensex stood at 75,683.34, down 256 points or 0.34%, while the Nifty50 was at 22,863.85, down 65 points or 0.29%.

The previous week saw the markets entering a correction phase after two weeks of gains, with a drop of about 2.5%. The sentiment remained weak due to continued selling by foreign institutional investors (FII), mixed corporate earnings reports, and ongoing concerns over global trade tariffs.

With the corporate earnings season wrapping up, investors are expected to shift their focus to FII flow patterns and currency movements. Additionally, ongoing discussions about U.S. tariffs and their global trade impact will continue to influence market sentiment. The domestic market is also likely to react to talks between Indian Prime Minister Modi and U.S. President Trump, as well as the final batch of Q3 earnings reports set for release today.

Nagaraj Shetti of HDFC Securities mentioned that if Nifty50 falls decisively below the 22,800 support level, it could drop to around 22,450 (20-month exponential moving average) in the short term. The immediate resistance for the index is at 23,250.

In the U.S., stocks ended mixed on Friday, with Nvidia gaining while Microsoft declined. U.S. Treasury yields dropped after President Trump announced reciprocal tariff plans, although he did not impose new tariffs. Asian markets showed mixed movements as investors weigh rising U.S.-EU tensions and upcoming central bank policy announcements.

Gold prices saw modest gains on Monday after a decline of more than 1% in the previous session, with investors awaiting further clarity on the impact of Trump’s proposed tariffs on global trade.

Foreign Portfolio Investors (FPIs) recorded net sales of Rs 4,294 crore on Friday, while Domestic Institutional Investors (DIIs) made net purchases of Rs 4,364 crore. The net short position of FIIs decreased from Rs 1.83 lakh crore on Thursday to Rs 1.89 lakh crore on Friday.