Mumbai, Feb 15 (NationPress) The Nifty and Sensex encountered challenges at elevated levels this week, prompting profit booking, as uncertainties in the global macroeconomic landscape and mixed earnings reports left investors apprehensive. Looking ahead, experts suggest that the direction of the market will be influenced by global trade developments, earnings outcomes, and sectoral momentum.

In the last week, Indian equity markets experienced significant declines across various indices. The Nifty 50 index has decreased by nearly 4 percent since February 5, now approximately 13 percent lower than its peak in September 2024.

The broader market has also faced considerable pressure, with the Nifty Midcap 100 falling by 2.5 percent and the Nifty Smallcap 100 declining by around 3 percent.

The smallcap index has entered a bear market phase, trading over 20 percent below its peak in December 2024.

These declines are attributed to worries regarding US tariff policies and a slowdown in corporate earnings, resulting in extensive sell-offs, particularly in small-cap stocks, according to Krishna Appala from Capitalmind Research.

On Friday, the Indian stock markets continued their downward trajectory for the eighth consecutive session. By the closing bell, the Sensex was down by approximately 200 points at 75,939, while Nifty dropped 102 points or 0.55 percent to finish at 22,929.

Experts indicate that while market volatility is a persistent characteristic, it also presents opportunities.

Rather than responding impulsively to short-term fluctuations, investors are encouraged to concentrate on strong businesses with long-term growth potential and favorable structural trends.

Even though the current market poses its own set of challenges, selective opportunities are surfacing. However, macroeconomic tailwinds remain robust.

Recent income tax relief measures and RBI rate cuts are anticipated to bolster consumption and savings in upcoming quarters. Although valuations are not yet at bargain levels, they have moderated, leading to selective opportunities for investors, stated Appala.

Osho Krishnan from Angel One noted that midweek brought a flicker of hope as the benchmark indices sought stability near a crucial psychological level.

However, this optimism was fleeting, as the final session of the week highlighted the prevailing bearish sentiment dominating the market.

“As we observe the price action testing both the swing low and the lower boundary of the 'Falling Wedge' pattern, it suggests a bearish sentiment in the market. Without significant domestic triggers, global events are likely to play a crucial role in shaping our market tone,” remarked Krishnan.

A selective strategy, concentrating on fundamentally sound businesses, is recommended during this period of near-term volatility, added Vinit Bolinjkar, Head of Research at Ventura Securities.