- The BSE Sensex closed February at 81,287.19, while the Nifty 50 ended the month at 25,178.65, reflecting marginal declines of 1.19% and 0.56%, respectively, compared to January. Following the sharp correction seen earlier in the year, markets traded in a relatively range-bound manner as investors assessed the Union Budget announcements and evolving global macroeconomic cues.
- Foreign Portfolio Investors (FPIs) turned net buyers with Rs. 22,615 crore inflows in February, reversing Rs. 35,962 crore outflows in January, although flows remained volatile with intermittent heavy selling such as Rs. 3,466 crore on February 26.
- Domestic Institutional Investors (DIIs) remained strong supporters of the market, recording Rs. 26,130 crore net inflows during the month, helping offset FPI volatility and limiting downside pressure.
- Brent Crude stayed elevated above $71 per barrel, raising concerns around inflation, fiscal stress, and pressure on India’s external balance.
- The Indian Rupee hovered near Rs. 91/USD, while relatively elevated equity valuations kept foreign investors cautious despite the return of inflows.
- Market performance remained highly divergent, with the Nifty IT index declining sharply by 20% in the last month following the Anthropic shock, while over a one-year period the Nifty 50 delivered 13% returns, with six stocks gaining over 50% (led by Shriram Finance at 92%), even as five stocks declined more than 20%, highlighting a strong stock-picker’s market.
- Market sentiment remained cautious, reflected in negative breadth (2,683 stocks declined vs 1,875 advanced) and a rise in India VIX by 3.42% to 13.51, indicating heightened volatility and investor nervousness.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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