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Informist, Wednesday, Mar. 26, 2025

By Gopika Balasubramanium

MUMBAI – Benchmark indices snapped a seven-day winning streak and closed sharply lower Wednesday due to investors booking profits after recent gains. The indices, which had gained almost 6% during the seven days, were dragged down by selling in index heavyweight stocks such as HDFC Bank, Reliance Industries, Infosys, and ICICI Bank.

Market participants are likely aligning their positions before Apr. 2, the deadline for the US to levy reciprocal tariffs across the globe, analysts said. The fall in the market due to profit-booking may continue and push the Nifty 50 down to 23200 points, before gradually recovering to cross 24000 points, they said.

Wednesday, the Nifty 50 closed at 23486.85 points, down 181.80 points or 0.8%. Only nine stocks in the 50-stock index closed in the green. The BSE Sensex closed at 77288.50 points, down 728.69 points or 0.9%. The fall was sharper in the broader market with the Nifty Smallcap 250 closing 1.4% lower. Barring Nity Auto, all the sectoral indices also closed lower. Nifty Auto ended largely flat on Wednesday after giving up intraday gains.

Though most Asian equity indices ended higher on Wednesday, indices in Europe were down. Investors in the US rejoiced the softening of the stance by US President Donald Trump on reciprocal tariffs, which will be effective from Apr. 2. The sentiment has improved slightly after Trump said he might take a more measured approach on tariffs.

Back home, Indian and US officials started bilateral talks as the deadline for the reciprocal tariffs approached. The negotiations between the countries will likely continue until Saturday in Delhi.

Market participants offloaded shares to cash profits, preventing the indices from any gains, analysts said. Some analysts even said that this could be a 'double selling' where some participants reaped benefits from the shares they held for the long-term and those who sold shares after buying at a lower price recently.
 

Among the stocks on the Nifty 50, NTPC was the worst hit, closing 3.4% lower. Shares of Tech Mahindra and Cipla also declined sharply and closed 2.3-2.7% lower. Banking and financial services stocks were the biggest laggards in the benchmark indices. Shares of private lenders Axis Bank, Kotak Mahindra Bank, and HDFC Bank closed 0.8-2.0% lower. These stocks had gained 6-10% over the last seven days.

The recent rise in banking stocks was mainly due to buying by foreign institutional investors, Bunty Chawla, research analyst tracking the banking, financial services, and insurance sector at IDBI Capital Markets & Securities, said. Fundamentally, there are a few factors turning positive for banks, especially the recent fall in yields of government bonds, which would contribute to higher treasury income, leading to better profits, he said.

Chawla also said that the earnings of banks in the March quarter will likely be better than the previous three quarters, and credit growth is likely to rise by 50-100 basis points to 12%. However, there will be a slight pressure in the net interest margins of the banks in 2025-26 (Apr-Mar) due to interest rate cuts but conditions will see improvement later on, he said.

On the other hand, IndusInd Bank was the top gainer in Nifty 50, closing 2.9% higher. The stock has not yet recovered from the nearly 27% fall on Mar. 11 after the bank disclosed discrepancies in its foreign exchange derivatives portfolio. Reports said the bank's board is likely to have appointed a search firm to scout for a new chief executive officer. Nifty 50 stocks such as Trent, HCL Technologies, and Hero MotoCorp gained 0.5-2.6%.

Among sectoral indices, Nifty Media fell the most and closed 2.4% lower. Nifty Auto was the sole gainer among sectoral indices but gave up most of the gains towards the end. Within Nifty Auto, Ashok Leyland closed 2.4% higher. Reports had said that Ashok Leyland may be close to acquiring the entire promoter stake in SML Isuzu Ltd. However, the company later denied the media reports as 'factually incorrect'.

Among individual stocks, NCC came off intraday highs and closed 1.7% higher after the company said it received two advance orders aggregating to INR 108.05 billion from Bharat Sanchar Nigam. Shares of Siemens closed 5.8% higher after the company said it would issue one share of face value INR 2 in the demerged company Siemens Energy India for every share held in Siemens. The company has set Apr. 7 as the record date for the same.

Defence stocks such as Hindustan Aeronautics, Solar Industries, Mazagon Dock Shipbuilders, and Bharat Dynamics closed 0.9-2.9% higher. Hindustan Aeronautics rose following media reports that General Electric Aerospace announced the delivery of the first of 99 F404-IN20 engines to the company for the Tejas Light Combat Aircraft Mk 1A fighter jet. This will mark the commencement of deliveries for the delayed Light Combat Aircraft programme. The reports said 12 engines are expected to be delivered this year.

* Of the Nifty 50 stocks, 9 rose and 41 fell 

* Of the Sensex stocks, 6 rose and 24 fell

* On the NSE, 622 stocks rose, 2,303 fell, and 60 were unchanged

* On the BSE, 919 stocks rose, 3,115 fell, and 109 were unchanged

* Nifty Media: down 2.4%; Nifty Oil & Gas: down 1.4%; Nifty Auto: up 0.02%

BSE                                               NSE

Sensex: 77288.50, down 728.69 points or 0.9%      Nifty 50: 23486.85, down 181.80 points or 0.8%

End

US$1 = INR 85.70

Edited by Saji George Titus

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