It was a tough four-day week for the markets as we had a bad Monday and Friday where markets fell sharply. Thursday was expiry day where benchmark indices were more or less flat but midcap and small cap gave way. At the end of it all it was a week which investors would like to forget in a hurry. BSESENSEX gained on two and lost on two sessions while NIFTY lost on all four trading sessions. BSESENSEX lost 2,112.96 points or 2.81% to close at 73,198.10 points while NIFTY lost 671.20 points or 2.94% to close at 22,124.70 points. The broader markets saw BSE100, BSE200 and BSE500 lose 3.38%, 3.55% and 3.81% respectively. BSEMIDCAP was down 4.41% while BSESMALLCAP lost 6.05%. 

The Indian Rupee lost 79 paisa or 0.91% to close at Rs 87.49 to the US dollar. Dow Jones gained on three of the five sessions and lost on two. It gained 412.89 points or 0.95% to close at 43,840.91 points. The volatility in the US markets has increased significantly and this is becoming worrisome. At the end of Thursday the weekly change was negative with markets down cumulatively 187 points, and then on Friday the whole was reversed with Dow gaining 612 points. This kind of movement is worrisome and indicates that the underlying sentiment has a lot of fear lurking. 

Thursday the 27th of February saw futures for February series expire. Bulls and bears held on to their position as markets went nowhere on that day with NIFTY losing a mere 2.5 points on expiry day. However, for the series the loss was 704.45 points or 3.03%. The series closed at 22,545.05 points. 

On the primary market front, we had the listing of Quality Power Electrical Equipment Limited, which listed on Monday the 24th of February. The issue price was Rs 425. The share debuted at Rs 432.05 and closed on Monday at Rs 387.05, a loss of Rs 37.95 or 8.92%. By Friday, the share lost further ground and closed at Rs 376.55, a loss of Rs 48.45 or 11.38%. Very clearly the market in its present mood is very harsh on any IPO where the valuation is stretched. It does not spare anyone.  If one were to look at the new issues which have listed in the last 10 weeks, of the 20 main board issues as many as half are in the red, which means below their issue price. This does not take into account the fall from their highs which was typically made immediately after listing over the next ten days or so. 

In such a brutal market, one hopes and prays that merchant bankers are able to temper the expectations of promoters waiting on the sidelines to open their issues. Valuations have to be moderated, failing which the issues will meet a fate which no one desires or hopes for.  

Markets are in a bad shape to say the least. While the fall from all-time highs made in September24 is a little over 15%, the impact is much more. New investors who joined the markets post covid beginning from March 2020 onwards, have never experienced a correction and that too one lasting over six months. This is a new learning and we are quite close to entering a bear market if the fall continues. 

The new SEBI chief has been announced. Tuhin Kanta Pandey has assumed office as the SEBI Chairman. He is the 11th Chairman. Prior to his appointment he was the serving Finance Secretary. He was Secretary at DIPAM, which handles the divestment program of the Government of India.  He understands Capital Markets and is not new to this important aspect of capital formation and markets. Expect SEBI to fire on all cylinders going forward. 

Coming to the markets in the week ahead, expect volatility to continue. FPI selling has continued and the only reason for it to stop could be if markets in US start correcting. The sell India and buy China markets is currently on as the valuations in China are attractive but tending to neutralize as valuations rise. In India, one could see interest in the benchmark indices underlying stocks coming as they start becoming attractive to invest. Not suggesting a turnaround anytime soon, but just the thought. As far as midcap and small cap sectors are concerned, the valuations there need plenty to correct.

Support for the NIFTY is around the 21,800-21,850 level in the coming days and further lower around 21,200-21,300 levels. They seem far off, but in the present mood we need to have some back up as well. These levels would correspond to 72,00-72,150 on BSESENSEX and followed by 70,200-70,500 points. On the resistance front, we had lot of support at 22,800 on NIFTY which would act as very strong resistance corresponding to 75,200-75,300 points. The strategy would be to look for pockets of support in the benchmark indices and large cap basket only. As far as midcap and small cap stocks are concerned, one may begin an exercise of identifying quality growth stocks which have weathered the storm and corrected as well. Not hinting at buying, but just short listing. 

In conclusion, trade cautiously and protect your capital.

The week gone by saw markets gaining on the very first day as expected, but losing every other day for the remaining four days of the week. The fall on a daily basis was not significant, but enough to dent the market and make it more vulnerable in the coming week. BSESENSEX lost 628.15 points or 0.83% to close at 75,311.06 points while NIFTY lost 133.35 points or 0.58% to close at 22,795.90 points. The broader markets saw BSE100, BSE200 and BSE500 behave differently with BSE100 losing 0.20% while the other two gained 0.06% and 0.22% respectively. BSEMIDCAP gained 1.62% while BSESMALLCAP was up 0.98%. Our markets gained on one trading session and lost on four of them.

The Indian Rupee gained 13 paisa or 0.15% to close at Rs 86.70 to the US Dollar. Dow Jones had a torrid week and lost on two of the four trading sessions and gained on one. It was virtually flat on the fourth session. It lost 1,118.06 points or 2.51% to close at 43,428.02 points. Friday was the worst performing day for the markets in US in calendar 2025 so far. Tariffs and rising cost of living coupled with sharp drop in confidence index is hurting the economy.  

Coming to our markets, you would be wondering why the markets turned on Monday? Markets gained on Monday the 17th of February, which could be termed as a relief and it broke the momentum of the falling market which would be a simple answer. Technically it is more than just that. The number eight, is an important part of Fibonacci series which is preceded by 5 and followed by 13. We had already suffered losses for eight consecutive days and if it had not turned, the next turning date would have been after another five days or after 13 days of fall. That is more or less unprecedented. Hence the one day of gain. FPI’s too sold on four of the five trading sessions during the week and bought on one. Looking at the fact that US interest rates look unlikely to decline in the near term as inflation is a cause for concern, expect the selling to continue. This would be even though this is the lowest FPI holding as a percentage in Indian markets. One other point worth noting is that the carnage in midcap and small cap one saw on Friday the 14th of February, actually helped many stocks recover some ground during the week gone by. It was just a corrective pull back because of the sharp selling and it should not be seen as a reversal. 

There were two listings on the main board in the previous week. The first was Ajax Engineering Limited which had issued shares at Rs 629. Shares listed on Monday the 17th of February at Rs 593 and closed day one at Rs 595.60. By weekend, the share had recovered some lost ground to close at Rs 604.05, a loss of Rs 24.95 or 3.97%. 

The second share to list was from Hexaware Technologies Limited. Shares which were issued at Rs 708, debuted at Rs 745.50 on BSE and Rs 731 on NSE on Wednesday the 19th of February.. The share closed at Rs 763.85 on BSE, a gain of Rs 55.85 or 7.88%. On the NSE, the share closed at Rs 755.75, a gain of Rs 47.75 or 6.74%. Shares gained further as the week progressed and they closed at Rs 818, a gain of Rs 110 or 15.54%. 

On Monday we would see the listing of Quality Power Electrical Equipments Limited. The company had tapped the capital markets with its issue between the 14th and 18th of February. The issue was subscribed an overall 1.29 times with QIB portion subscribed 1.03 times, HNI portion subscribed 1.45 times and Retail portion subscribed 1.83 times. The price band was Rs 401-425. The response could at best be termed as muted for the issue.  With a weak market expected today one wonders how this issue would list. 

I have repeatedly been pointing out that merchant bankers and promoters have been out pricing their issues. A fall out of this is that there are no issues opening this week and none on the anvil in the following week either. It’s a wake up call for merchant bankers and they need to understand that when investors apply for an IPO, listing gain may not be a criteria, however capital erosion is something they do not expect. Hope in the short hiatus, one sees some wisdom dawning on the people concerned, otherwise it would have been a case of killing the golden goose. 

The week ahead sees February futures expire on Thursday the 27th of February. This would be preceded by a trading holiday on Wednesday the 26th of February. The current level of NIFTY at  22,795.90 points is lower for the series by 453.60 points or 1.95%. the series had begun at 23,249.50 points. With a mere three sessions to go, it would be a tall order to expect the bulls to pull it back. On ground reality, expect the bears to have a smooth sailing in capturing this series comfortably. They could increase the lead to their advantage. 

The markets have been successfully holding ground at the broad band of 22,700-22,800 and has done so on multiple occasions in the immediate past. God forbid if this were to break and sustain on the downside. We could see mayhem in the market ensuing. 

Coming to the markets in the four-day week which has expiry as well. It would be effectively two periods of two sessions each separated by a holiday. Expect markets to open weak after what happened in the US on Friday and the fact that over two consecutive sessions the Dow has lost about 1,300 points. With strong support likely to give way in our markets we could be in for a torrid time. Next support would be at 22,300-400 points on NIFTY and at 73,800-74,100 points on BSESENSEX. On the upside it appears that levels of 23,250-23,300 and 76,650-76,800 would be very strong and tough to overcome. 

The trading strategy would be to look for safety in large cap stocks and refrain from dabbling in midcap and small cap stocks unless they have been researched and short listed by you. Trade cautiously and wait if you are looking to make a portfolio for yourself. Allow markets to stabilize as currently we have more uncertainty and volatility than desirable.