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The Indian stock market witnessed a downturn on April 25th, with both the Sensex and Nifty extending their losses for the second consecutive session. This negative performance was largely attributed to underperformance in the auto and pharmaceutical sectors, which experienced significant declines. Twelve out of thirteen sectoral indices traded in the red, reflecting broad-based weakness in the market. While the information technology (IT) sector provided some support, its gains were insufficient to offset the overall bearish sentiment. Despite the negative trend, both the Sensex and Nifty managed to pare some of their early losses by the late afternoon, indicating a degree of resilience among investors. At the close of trading, the Sensex was down by 588.90 points, or 0.74 percent, settling at 79,212.53. The Nifty mirrored this decline, falling by 207.35 points, or 0.86 percent, to close at 24,039.35. The overall market breadth was negative, with a greater number of shares declining compared to those advancing. Specifically, 682 shares advanced, while 3138 shares declined, and 115 shares remained unchanged, highlighting the pervasive selling pressure across various sectors.
Despite the recent losses, market experts suggest that the Indian stock market is currently influenced by a combination of positive and negative factors. A significant tailwind is the strong inflow of foreign institutional investor (FII) funds. Over the past week, FIIs have invested approximately Rs 29,513 crore into the Indian market, reversing a previous trend of capital flowing into US stocks due to a strengthening dollar. This sustained interest from foreign investors is seen as a positive signal that could discourage bearish positions in the short term. Another encouraging development is the statement made by US Treasury Secretary Scot Bessent, indicating that India could be the first country to establish a bilateral trade agreement with the United States. As the US seeks to diversify its trade partnerships amidst a tepid response from China, India's robust and resilient economy positions it favorably for such an agreement. This potential trade deal could further boost investor confidence and contribute to the overall positive outlook for the Indian economy. However, a critical headwind facing the markets is the uncertainty surrounding India's potential response to a recent terror attack and the potential geopolitical ramifications of such a response. This geopolitical risk adds a layer of complexity to the market environment and could lead to increased volatility.
The broader market also experienced weakness during the trading session, with both the Nifty Midcap 100 and Smallcap 100 indices declining by 2.5 percent each. This indicates that the negative sentiment extended beyond the large-cap stocks and affected a wider range of companies. According to Rajesh Palviya of Axis Securities, the ongoing market correction has helped to moderate valuations, but the market has not yet reached a deep value zone. He suggests that while valuations are not extremely attractive, investors are primarily focused on companies with clear and visible earnings potential. Among the various sectoral indices, Nifty Pharma, PSU Bank, Energy, Oil & Gas, Realty, Infra, and Auto all experienced declines ranging from 1.5 to 2 percent. The Nifty IT index was the only sector to post gains, rising by 0.72 percent, driven by positive performance from companies such as TCS, Infosys, Persistent Systems, and Coforge. This highlights the relative strength of the IT sector compared to other areas of the market. In terms of individual stocks, Maruti Suzuki experienced a decline of over 2 percent after reporting a 4 percent decrease in net profit, which fell short of market expectations. The automaker reported a profit of Rs 3,711 crore, compared to analyst estimates of Rs 3,852 crore, according to a Moneycontrol poll. Despite the lower-than-expected profit, the company declared a final dividend of Rs 135 per share for the fiscal year 2024.
Conversely, SBI Life Insurance emerged as the top performer on the Nifty 50, surging by over 5 percent following its March quarter results and positive commentary from brokerages. Nomura maintained a Buy rating on the stock with a target price of Rs 1,800, while Motilal Oswal set a more optimistic target of Rs 2,000. The insurer reported strong growth in both renewal and first-year premiums, although a decline in single premiums had a negative impact on overall performance. On the other hand, Axis Bank shares declined by over 4 percent after reporting a flat net profit of Rs 7,118 crore for the fourth quarter of fiscal year 2025, slightly below the Rs 7,130 crore reported in the same quarter last year. Despite the relatively unchanged profit figure, the bank exceeded expectations due to higher core lending income. Total income increased by 6 percent to Rs 38,022 crore, compared to Rs 35,990 crore in the fourth quarter of fiscal year 2024. From a technical perspective, Sameet Chavan of Angel One noted that the Nifty has already confirmed a bullish undertone by surpassing the February–March swing highs near 23,900 and remaining above the 200-day simple moving average (SMA) at 24,000. He suggests that this previous resistance zone is now expected to act as a strong support level. He identifies resistance levels at 24,400 and then at 24,550, which represents the 61.8 percent retracement of the decline from all-time highs. He advises traders to maintain a positive bias and to utilize dips towards the key support zone as buying opportunities. The top gainers on the Nifty included SBI Life, TCS, Tech Mahindra, Infosys, and UltraTech Cement, while the top laggards included Adani Enterprises, Axis Bank, Adani Ports, Shriram Finance, and Trent.