Sensex Bloodbath: In February, 4,000-point crashes move to Rs 40 lakh crore. Time to buy or bracket for more?

February proved to be a ruthless month for Indian equities, showing a percentage loss in terms of percentage, closing below 000,5 points. The overall market capitalization of BSE-listed companies has dropped by more than Rs 4 lakh crore in just one month. The Nifty suffered the longest row of its longest defeat since its inception in 1996, registering its fifth consecutive month loss.

Since picking in late September, the benchmark Nifty and the Sensex have declined by 15%, while widespread market indices have also seen a sharp improvement. The Nifty has dropped 26% from its top, while the Nifty Midcap is 150 21% below its top. The massacre has been more clear in the small-cap and micro-cap segment, both of which have improved about 26-27%.

While the Nifty itself has not yet entered the bear market, 30 of its 50 component stocks is already in the grip of the bear. It is noteworthy that, at least four stocks – Tata Motors, Adani Enterprise, Trent and Hero MotoCorp – have declined more than 40% from their peaks.

One of the main drivers to sell is an aggressive foreign institutional investor (FII) activity. Foreign investors have so far flooded Indian equity of $ 12.2 billion in 2025 after a net sales of $ 12.3 billion in the fourth quarter of 2024.

Also read | The Nifty records the longest row since birth in 1996. Is it even the most bloody?

GeGit Financial Services Chief Investment Strategist D .. VK Vijay Kumar pointed to geographical political stress and trade concerns as additional factors affecting the markets.

“Tariff’s declaration by Trump is affecting the markets and the latest announcement of an additional 10% tariff on China is a market point of view that Trump will use his presidential early months to threaten tariff countries and then negotiate the US for a favorable settlement. It is yet to be seen how China reacts to the latest round of tariffs. Now the markets have been in the U.S. And did not allow a fully developed trade war between China. It is likely to be avoided, “he said.

Technical correction, not macro distress

Chris Wood, the global equity strategist of Jefferies, repeated that the ongoing improvement is mainly technical in nature. “For the first time since the stock market began to improve the stock market properly, the base case of greed and fear is that the sales-off is mainly technical in nature reflecting multiple compressions rather than any rigorous macro issues,” Wood wrote. Greed and fear Newsletter.

Also read | Is the stock market crash technology or governed by macro concerns? Chris Wood explains

Changes in market mobility?

According to Merysis, the broad market seems to be stuck in the cell-sthot, now the decline is now mainly mainly in the more liquid frontline Nifty 50 and the Nifty 100 stocks. “This can also be attributed to the fact that the liquidity in the broader market has dried up, and now part of that market is being sold to produce liquidity,” Merysis noted, “Mariesis noted.

Pay FirMi believes that the ongoing recession can mark the final phase of capitulation, which can set the stage for strong counter-trend bounces in markets in the next 4-6 weeks.

Also read | Big red flag? Holding in Nifty stocks crash 22 years low because the cash inside

Is green shoots emerging?

Despite the sharp decline, some market participants see the reasons for optimism. Alok Agarwal of AL Lakmi Capital Management published that corporate earnings, not the stars, also show significant improvement than the previous quarters. “The results of the corporate earnings were not too great, but at least they were much better than the last two quarters, in which the Nifty reported the growth of the 500’s profits,” Agarwal noted.

He also pointed to the active stance of the Reserve Bank of India (RBI) to manage liquidity and supporting growth. “There are a lot of green shoots and signs of recovery procurement are getting available. Of course, the pace and motion at which the overall market is clearly improving the dents sentiment, but this is a great time when adding in portfolio proves to be a really one year, disproportionate return, “he added.

What should investors do?

Technical factors and FIIs bring significant pressure with outflows, the Indian stock market is at a crucial stage. When some experts deteriorate macroeconomic data, they will expect further improvement, others believe the market is closer to potential bounce. The coming months will be crucial in determining whether the recession expands or stabilizes in anticipation of recovery procurement.

Mira Asset’s Manish Jain advises investors to avoid aggressive conditions until macro economic data is stabilized. “Timwise correction by November/December, if the data-set is bad, then a foot of price-wise correction is expected,” he noted.

(Disclaimer: The views given by recommendations, suggestions, opinions and experts are their own. This does not represent the views of the economic time)