The fall in the stock market broke the record of the last 30 years
The storm in the stock market is not taking the name of stopping. The market decline that has been going on for 5 months is now close to breaking a new record. Due to the continuous decline in the Indian stock market, the Nifty 50 index is heading towards the second longest monthly decline in its 30-year history. NSE’s flagship index Nifty started in July 1990, and since then there have been only two times when Nifty 50 has registered a decline of five or more months in a row.
So far in February 2025, the Nifty has seen a decline of 4%, while only three trading sessions of this month are left. In the last five months, the Nifty has come down a total of 12.6% from the level of 25,811 at the end of September 2024.
Bad condition of stocks
During this decline, one out of every five stocks included in the Nifty has fallen by more than 28%. Major losers include Trent, Adani Enterprises, Asian Paints, BPCL, Hero MotoCorp, Bajaj Auto and Tata Motors, which have declined between 31% and 33%.
Among stocks with high weightage in the index, Hindustan Unilever (HUL), ITC and Reliance Industries have lost 24%, 22% and 18%, respectively. Only three stocks—Wipro, Bajaj Finance and Kotak Mahindra Bank—have made gains during this period, rising between 6% and 9%.
How much more will it fall?
Technical analysts believe that the Nifty may soon fall to the level of 22,500 to 22,400. As long as the Nifty remains below 22,850, there will be selling pressure in it. This means that as soon as the Nifty moves up a little, investors will start selling shares. According to Rupak Dey, Senior Technical Analyst at LKP Securities, the index has been falling since the end of September last year and is forming a lower top-lower bottom pattern on the daily chart, which is a sign of weakness in the market.
Why is the pressure on the market increasing?
Apart from this, the trade war between the US and China and the boom in the Chinese stock market have also increased the pressure on the Indian market. Foreign investors are withdrawing their money from India and investing it in China, which has increased the selling pressure in the Indian market. Since October 2024, India’s market capitalization has declined by $1 trillion, while China’s has increased by $2 trillion. The Hang Seng Index has climbed 18.7% in just one month, while the Nifty has declined by 1.55%.
What strategy are foreign investors following?
Analysts believe that this trend of ‘sell in India, buy in China’ may continue, as Chinese stocks are still cheap. According to Vaibhav Porwal, co-founder of Dezerv, China announced an economic stimulus package in September 2024 to boost the economy, which has led to a boom in the stock markets there.
Opinion for investors
In such an environment, experts suggest that investors should invest wisely in good stocks and avoid investing in small stocks whose annual profit is less than Rs 100 crore. Also, they should also consider selling loss-making stocks for tax benefits.
Sensex is also in bad shape
The 30-share index Sensex of the BSE was at its record high of 85,978.25 on September 27 last year. After that day, the stock market was under such a bad influence that a continuous decline started in the domestic stock market and the Sensex and Nifty kept falling. In the last five months, the Nifty has fallen 3,729.8 points or 14.19 percent from its all-time high. At the same time, the Sensex has fallen by 11,376.13 points or 13.23 percent from its record peak.
