Are There Opportunities In This Blood Bath ?

Market Update - Tuesday, 24 Feb

The markets faced a turbulent session today, with the Nifty roiled by a significant drop of almost 350 to 400 points at one stage. While there was a slight recovery toward the end, the atmosphere remains very tentative.

Market participants are extremely nervous as they look ahead to a State of the Union address by President Trump scheduled for 7:30 AM tomorrow morning. The uncertainty surrounding potential announcements—whether they involve a declaration regarding an Iran war or new tariff tantrums—is keeping everyone on edge.

The Nifty IT index is currently experiencing a collapse like nobody’s business. This sell-off follows the release of a report and an article yesterday forecasting that the world will be a very different place by 2028. Global markets reacted sharply to this news; US markets, I share, and Indian markets all moved lower.

Looking at the broader market, the Nifty was down 1.12% but is not "out." A technical gap still exists that did not get filled today, suggesting there is still some underlying strength rather than a weakness where a single nudge would cause a total fall.

• Meanwhile, the Nifty Junior was flat at 0.08%, mid-caps were marginally down by 0.28%, and small-caps fell 0.6%, recovering slightly from their bottoms.

• The Nifty Bank fell 0.35%. No major technical levels were broken today, and the market remains within its established range.

• In commodities, gold fell 1% today to 16,027 per gram, despite a dramatic rise last evening.

• Silver is running up at 272,000 per kg, remaining flat for the day.

Other Market Triggers

• In contrast, the Nifty Next heat map showed more green. Capital goods like Siemens and ABB were running up, as were metals and oil companies.

• However, losses were seen in Hyundai, LTIM, and DLF.

• Persistent was a major mover of the day, dropping 6.3% due to AI-led disruption fears.

• The damage extended to large mid-caps like LTIMindtree, Tech Mahindra, Persistent, HCL Tech, and Coforge, which fell 6% to 7%. Even giants like Infosys and TCS were not spared.

U.S. Market Updates

• In the US, IBM dropped 13% following reports of alternatives to its code, while Capital One, American Express, Accenture, and Mastercard saw crashes of 6% to 9%.

• While top-tier tech names like Meta, Microsoft, and Google were hit, the second layer of the US market sustained the most damage.

What to watch next ?

• The downturn in IT is leading to serious second-order issues, particularly in recruitment.

• These companies were once the largest recruiters at universities, but they have now stopped hiring and are not even replacing staff who leave.

• Many large companies have lost double digits of their workforce in recent months. This creates a snowball effect regarding how to absorb a workforce trained in skill sets that may no longer be in demand.

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What To Read This Week ?

The Noise vs. The Numbers: Why Market Resilience Always Wins

It’s easy to feel like the sky is falling when you look at the headlines. From the Funds India Report covering the last 35 years of the Sensex, a clear pattern emerges: the market is a "wall of worry." Whether it was the Gulf War in the '90s or the recent shifts in US tariffs and global conflicts, there is always a reason to sell. But while the news cycle is volatile, the trajectory of growth has remained remarkably steady.

The "Fear Factor" Cycle

History is a broken record of crises. If you had listened to the "narrative" at any point in the last three decades, you would have stayed on the sidelines. We’ve seen everything from the Harshad Mehta Scam and the Asian Financial Crisis to modern-day Yen carry trade unwinds and geopolitical tensions between Iran and Israel.

Each of these events felt like a "market killer" at the time. They created a "fear factor" that made investors believe a total crash was imminent. Yet, despite these shocks, the market hasn't just survived—it has thrived.

The Power of the Undercurrent

There is an undeniable resilience in the market that news headlines cannot destroy. Think about the scale: the Sensex moved from 1,000 points to 80,000+ points between 1990 and today.

While we might see sharp intraday falls or a few weeks of red on the screen, the underlying growth of the economy acts as a powerful undercurrent. This move is nearly impossible to stop because it is fueled by the fundamental growth of the country, not by the sentiment of a TV anchor.

Rising Above the "Noise"

To be a successful investor in India, you have to develop a filter. There is a constant "noise" generated by global media and local panic. If you can step above that noise, you’ll realize that we are witnessing a generational opportunity.

India is one of the fastest-growing economies in the world. Very few investors globally have the chance to ride a growth curve this steep. The secret isn't in timing the next "scare"—it’s in staying invested despite them.

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