New Delhi: 

 The stock market's decline shows no signs of stopping. According to data, it is experiencing its longest decline in over two decades. Experts also believe that, in the past four years, many new investors have entered the market. As a result, panic selling on their part is pulling the market even further down. On February 28, the Sensex saw a drop of 1,414 points (1.9%), and the Nifty fell by 420.35 points (1.86%).

Senior independent share market analyst Ambareesh Baliga told ETV Bharat that in the past four years, nearly 12 crore new demat accounts have been opened, and more people have started trading in the market. He analysed that these people have never experienced such a significant fall in the market and now they are losing confidence, selling in panic and further dragging down the market.

Whenever weak data appears, the market tends to decline and that’s what's happening now. When fundamental factors are weak, there is also a corresponding weakness in technical charts, with selling occurring at every level. Moreover, there are many new investors in the market who have never experienced a major downturn, added Baliga.

In the past few weeks, the significant decline in the market has largely been attributed to disappointing corporate earnings, which have been much worse than expected. Additionally, the GST and GDP data have also fallen short of expectations. While the Indian economy may be performing relatively better compared to the global market, it is still falling short of previous forecasts. 

According to him, there’s a common belief that every decline presents a buying opportunity, but over the past six months, this idea has been disregarded, and the decline continues to dominate.

Every time there’s buying, it’s followed by further declines. There’s also concern that there may be more downward movement in the coming days, with no positive global news to offer the market any relief, added Balinga.

Corporate quarterly results are also failing to meet market expectations and for the past six months, companies' earnings have not been justifying their stock prices, which is why investors are not feeling motivated to invest, Saraogi said.

CEO of market research firm Equityrush Kunal Saraogi told ETV Bharat that the tariff measures being taken by the US have created panic in the markets since long. He also added that Indian stocks that were already expensive, with high valuations, are now experiencing a sustained decline.

According to Saraogi, in the past, when foreign investors sold off, domestic buying would compensate for it. "However, this time, due to high valuations, that isn't happening," he added.

He also pointed out that this is the first time in decades that the market has seen a continuous decline for five-six months. "The drop has been particularly sharp in mid-cap and small-cap stocks, although the valuations of large-cap stocks are now more reasonable," he added.

However, he mentioned that the worst phase might be nearing its end. "While there could be some more short-term declines, the market may eventually start moving in the right direction again," he quipped.

The Q3 GDP growth for India, which was released post-market hours; came at 6.2% in-line with market expectation and an improvement from 5.4% in Q2.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Limited, said that the fall in market was majorly on account of weak global cues after several comments from US President Donald Trump on levying additional tariff on China and nervousness ahead of India’s GDP data.

"This is expected to provide some relief in the current volatile environment. The broader market continued to face heavy selling pressure with Nifty Midcap100 falling by 2.5% and Smallcap100 down 3%. On the sectoral front, Nifty IT was the biggest loser, declining over 4% after the release of a weak US Q4 GDP which grew at a slower pace of 2.3% on an annualised basis compared to 3.1% growth reported in the September quarter," he added.

According to Siddhartha Khemka, Donald Trump reaffirmed 25% duties on imports from Canada and Mexico to come into effect from March 4. He also stated that goods from China will be subject to an additional 10% duty and mentioned that 25% tariffs on the European Union will be announced soon, heightening fears of a trade war. Further, weak INR and continued FII selling extended pressure on the domestic market. Nifty has fallen almost 6 per cent in February, its fifth consecutive month of decline. We expect market to continue to trade with weakness due to weak global sentiments and lack of domestic triggers, added Khemka.

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