Stock market witnessed volatility on March 3, 2025, as the Nifty 50 and Sensex closed in the red despite recovering from intraday lows. The Nifty 50 ended slightly lower by 0.02% at 22,119, while the Sensex declined 0.09% to settle at 73,085.

While the broader market saw mixed trends, the Nifty Midcap 100 gained 0.14%, closing at 47,984, while the Nifty Smallcap 100 fell 0.27% to settle at 14,660. The session was marked by cautious investor sentiment, especially in smallcap and financial stocks.

Volatility Amid Global Trade Concerns

After a sharp sell-off in the previous session, the Indian stock market attempted a recovery in early trade, opening in the green. However, weak global cues and selling pressure in key sectors pushed indices lower by midday.

Strong buying in metal, realty, and IT stocks helped the market recover from its lows, with the Nifty 50 rebounding 112 points (0.52%) and the Sensex gaining 302 points (0.42%) from their respective intraday lows.

This decline marks the ninth consecutive loss for both indices, with a cumulative drop of over 3% during this period. The worst intraday performance came on February 28, when the Nifty and Sensex dropped over 1.8% each.

Global Trade Tensions Weigh on Market Sentiment

Investors remain on edge as global trade tensions escalate, with U.S. President Donald Trump announcing fresh tariffs on imports. The uncertainty surrounding tariff rates on Chinese goods and U.S. trade policies with Canada and Mexico have further rattled markets.

Adding to concerns, U.S. Commerce Secretary Howard Lutnick suggested that Trump might reconsider the 25% tariff level, introducing further unpredictability. The fear of retaliatory measures by affected countries has increased global market volatility.

Indian Economy Sees Growth but Faces External Pressure

On the domestic front, India’s GDP grew 6.2% year-on-year in Q3 FY25, rebounding from a seven-quarter low. This was an improvement over the 5.6% growth recorded in the previous quarter.

Despite this, foreign investors have been pulling out funds from Indian equities, citing overvaluation concerns compared to global peers. Additionally, Trump’s proposed reciprocal tariffs on Indian goods have further dampened investor confidence.

Sectoral Performance: Realty Stocks Gain, Financials Lag

Among sectoral indices, the Nifty Realty index led the gains, rising 1.42%, though it remains 30% below its recent peak. The index has seen a 24% correction over the past two months, marking its worst two-month sell-off in five years.

Other sectoral indices that ended in the green included Nifty Metal, Nifty IT, Nifty Auto, Nifty Pharma, and Nifty FMCG, with gains between 0.23% and 1.24%.

On the losing side, Nifty Media was the worst performer, dropping 0.83%, followed by Nifty Oil & Gas, Nifty Bank, and Nifty Financial Services.

Key Stocks in Focus

Several stocks were in the spotlight due to corporate developments and regulatory actions:

• Indian Overseas Bank hit a 52-week low after receiving a GST demand of Rs 699.5 crore.
• Mastek declined as SEBI issued a warning over unpublished price-sensitive information.
• NCC surged after securing a Rs 218.8 crore order from a state government.
• Ujjivan Small Finance Bank gained as it sold Rs 364.5 crore worth of NPAs to an asset reconstruction company.
• Dalmia Bharat announced a Rs 3,520 crore investment in new cement production units in Maharashtra and Karnataka.
• Mankind Pharma faced a Rs 111.7 crore tax demand from the Income Tax Department.
• Piramal Enterprises received a GST demand of Rs 1,502 crore, linked to the sale of its pharma business.

Market Outlook: Will the Recovery Sustain?

The gradual recovery from intraday lows was driven by strong economic growth indicators, increased consumption, and stability in the agricultural sector. However, investors remain cautious due to ongoing global uncertainties.

With valuations nearing oversold levels, some analysts believe a rebound could be on the horizon. However, the longevity of this recovery depends on global trade conditions, which currently show limited signs of improvement.

In the coming sessions, market participants will closely monitor global cues, foreign investor flows, and corporate developments. The RBI’s upcoming policy meeting and any announcements on interest rates or economic stimulus will also play a crucial role in shaping market trends.

Despite a strong intraday recovery, the Indian stock market ended lower, continuing its losing streak. Global trade tensions, cautious foreign investor sentiment, and regulatory actions weighed on sentiment. While some sectors saw gains, smallcaps and financial stocks remained weak. Investors should remain cautious amid ongoing global uncertainties and closely track upcoming economic and policy developments.

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