Indian equity markets closed on a weaker note on February 12, as volatility persisted throughout the session. The benchmark Sensex dropped 122.52 points or 0.16 percent to settle at 76,171.08, while the Nifty declined 26.55 points or 0.12 percent to close at 23,045.25. In Market breadth was negative, with 1,487 stocks advancing, 2,334 stocks declining, and 85 stocks remaining unchanged. The broader BSE Midcap and Smallcap indices both shed 0.5 percent, reflecting the subdued sentiment in the market.
Sectoral and Stock Performance
Among Nifty stocks, Mahindra & Mahindra, Bharat Electronics, Eicher Motors, ITC, and Hero MotoCorp were the major losers. On the other hand, SBI Life Insurance, Bajaj Finserv, HDFC Life, Shriram Finance, and Tata Steel emerged as the top gainers.
Sectorally, the PSU Bank and Metal indices managed to stay in positive territory, while all other sectoral indices ended in the red. The Realty index was the worst hit, tumbling nearly 3 percent.
What’s Spooking the Stock Market?
Factor number one – Donald Trump. The US President’s policies, especially imposing heavy duties on imports to the United States, have made investors jittery across the world. Then the rise in returns from US government bonds – something that’s pulling money away from other markets to the US.
The third factor, according to some experts, is Indian stocks being too expensive compared to their peers. And that’s the reason many foreigners are dumping Indian stocks. Then, there are also concerns about the Indian economy – which despite being the fastest growing major economy in the world, isn’t growing on expected lines.
Rupee Movement
The Indian rupee also saw a slight decline, closing at 86.89 per US dollar, compared to its previous close of 86.83 per US dollar on Tuesday.
Gold ETFs Witness Record Inflows
Amid ongoing market volatility, investors flocked to safe-haven assets, leading to a record inflow of Rs 3,751 crore into Gold Exchange Traded Funds (ETFs) in January. This marked a staggering 486 percent monthly surge and a 471 percent year-on-year increase. The demand for gold was primarily driven by expectations of interest rate cuts and heightened geopolitical risks.
The total assets under management (AUM) for Gold ETFs saw a sharp 16 percent month-on-month rise to Rs 51,839 crore, marking an 87 percent annual growth. Notably, no new Gold ETFs were launched in January.
Outlook
With ongoing market volatility, investor sentiment remains cautious. While equity markets grapple with uncertainty, the strong inflows into Gold ETFs indicate a growing preference for safer investment avenues. Going forward, global economic developments and domestic factors such as inflation and monetary policy will play a crucial role in shaping market trends.