The Indian equity markets have been facing significant headwinds, with a broad-based decline affecting a majority of stocks. The Nifty 50, a benchmark index for the Indian stock market, has retreated 6.80% from its peak of 26,277.35, highlighting the extent of the market correction.

Widespread Market Weakness

A comprehensive study conducted by Samco Securities, analyzing 750 listed stocks, has revealed the depth of the market downturn:

• Only 245 stocks managed to deliver positive returns
• 485 stocks traded lower than their year-ago levels
• The median return stood at -11.50%
• The average return was calculated at -6.25%

This data paints a picture of widespread weakness in the Indian equity markets, with two-thirds of Nifty 500 stocks trading below their levels from a year ago.

Factors Behind the Decline

Several factors have contributed to the bearish sentiment in the Indian markets:

• Global conflicts
• Tariff shocks
• Selling pressure from foreign investors

These elements have collectively weighed on investor sentiment, leading to the broad-based decline observed across various sectors.

Sectoral Performance

Despite the overall negative trend, some sectors have managed to buck the trend and post gains:

• Capital markets
• Defence
• PSU banks
• Financials

These sectors have shown resilience in the face of broader market weakness, potentially offering some relief to investors with exposure to these areas.

Alternative Assets Outperform

In stark contrast to the equity market's performance, alternative assets have significantly outperformed traditional investments:

This divergence highlights the potential benefits of diversification across different asset classes during periods of equity market stress.

Market Outlook

The current market scenario presents a challenging environment for equity investors. With a significant portion of stocks trading below their year-ago levels, investors may need to reassess their portfolios and investment strategies. The outperformance of alternative assets suggests that a diversified approach could help mitigate risks in volatile market conditions.

As global and domestic factors continue to influence market sentiment, investors and market participants will be closely watching for signs of a potential turnaround in the Indian equity markets.

Indian equity markets extended their losing streak to the fourth consecutive session as concerns over potential US economic actions against India dampened investor sentiment. The uncertainty surrounding new H-1B visa regulations announced by Donald Trump weighed heavily on market performance.

Market Performance

The NSE Nifty index fell 112 points (0.45%) to close at 25,056.00, while the BSE Sensex dropped 386 points (0.50%), ending the day at 81,715.00. Both benchmark indices have witnessed significant declines over the past four trading sessions, with the Nifty and Sensex losing 1.40% and 1.60% respectively.

H-1B Visa Impact

The market downturn was primarily triggered by Donald Trump's announcement of a $100,000 levy on new H-1B visa applications. This move is expected to have a notable impact on Indian IT companies, which are major beneficiaries of the H-1B visa program. However, analysts estimate that tier-1 IT companies may only see a 1-2% impact on their profits. Despite the relatively modest financial implications, the news has soured market sentiment, leading to widespread profit-taking.

Investor Activity

Foreign portfolio investors (FPIs) showed a cautious approach, selling shares worth ₹2,425.70 crore. In contrast, domestic institutional investors displayed confidence in the market, purchasing ₹1,211.70 crore worth of shares.

Market Context

The current market correction comes after a strong rally that saw the Nifty surge from 24,400.00 to 25,400.00 in just three weeks. This rapid ascent was fueled by robust GDP numbers and GST cuts, pushing momentum indicators into overbought territory.

Analyst Outlook

Market analysts view the ongoing correction as a short-term phenomenon within a broader uptrend. They anticipate support levels for the Nifty in the range of 24,500.00 to 24,800.00.

As the Indian equity markets navigate through these challenging times, investors and analysts alike will be closely monitoring developments in US-India economic relations and their potential impact on key sectors, particularly IT.