By VK Sharma
The Nifty slumped 420 points, or 1.86%, on Friday to close at its lowest since June 2024 at 22,124. The markets didn’t know what hit them as 789 stocks or 26.5% of the stocks traded hit their 52-week lows. Small-cap stocks bore the brunt as the small-cap index slipped 3.01%. For the week, the Nifty slumped 2.94% and the small-cap index tanked 5.99%. For the month, the fall was 5.89% and 13.07%, respectively.
With this 5.89% fall in February, the Nifty now has closed lower for the fifth month on the trot. This equals the record of five consecutive falls on monthly charts that the Nifty had recorded from July to November 1996.
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Last week, we had reiterated that the markets could retest election-time lows seen during the week ended June 7, 2024, at 21281. Before that, the level of 22460, a 76.4% retracement of this swing, could have acted as a support, but the Nifty pierced through that like a knife in butter and closed at 22,124.
Trump’s policies continue to shape global markets. Last week, Trump slapped a 25% levy on imports from Canada and Mexico. He also doubled levies on Chinese imports to 20%. Asian markets slumped Friday on this unexpected move.
Meanwhile, the US and Ukraine talks ended abruptly and the minerals deal between the two countries couldn’t be signed, which was meant to be the first step towards a ceasefire with Russia. This gives a breathing space to Xi ahead of the National People’s Congress that begins on March 5. A deal would have put Xi in a corner.
Economic data emanating out of the US were positive for the markets. The January, PCE inflation eased to 2.5% from 2.6%, which was in line with economists’ expectations. Consumer spending, which accounts for two-thirds of the US economic activity, dropped by 0.2% following an upwardly revised expansion of 0.8% in December. Analysts had seen the number increasing by 0.2%.
The US markets closed higher on Friday despite a failed meeting with Ukraine.
Coming back to our markets, the GDP data came in after the markets closed on Friday. The economy grew at 6.2% in Q3FY25,
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