Markets Recover from Early Losses; IndusInd Bank Plummets 27%

On March 11, 2025, the stock markets displayed a strong recovery, closing almost flat after a shaky start. This recovery came despite opening significantly lower due to disappointing global market signals. A notable event was the sharp decline in IndusInd Bank shares, which dropped dramatically after the bank reported considerable accounting discrepancies in its derivatives portfolio.

The benchmark Sensex ended the day lower by just 12.85 points, or 0.02 percent, settling at 74,102.32. Earlier in the day, it had seen a drop of as much as 371 points. On the other hand, the broader Nifty index managed to finish on a positive note, adding 37.60 points, or 0.17 percent, to close at 22,497.90.

IndusInd Bank's stock was a focal point of the market's attention. It plunged 27.06 percent to hit a 52-week low of ₹656.80 after the bank disclosed that it had discovered inconsistencies amounting to ₹15.3 billion in its derivatives portfolio. This figure constitutes around 2.35 percent of the bank's net worth. Analysts predict that this revelation could lead to a loss of approximately ₹1,500 crore in the fourth quarter of the financial year 2025, thereby significantly denting the bank's profitability and credibility.

Despite the weak opening, the Nifty index showed notable resilience by erasing losses and recovering throughout the trading session. Retail stocks emerged as significant gainers, with companies like Trent rising by 4.13 percent to ₹4,998. Other notable performers included BPCL (+3.02 percent), Sun Pharma (+2.82 percent), BEL (+2.49 percent), and ICICI Bank (+2.41 percent).

On the downside, besides IndusInd Bank, other significant losers included Infosys (-2.02 percent), Bajaj Finserv (-1.75 percent), Mahindra & Mahindra (-1.66 percent), and Power Grid (-1.35 percent).

The overall market breadth remained negative, with a remarkable 2,506 stocks declining compared to just 1,466 advancing on the BSE. Additionally, 233 stocks reached their 52-week lows, whereas only 60 hit yearly highs, indicating a challenging environment for many investors.

Sector-wise, performance was mixed. The realty index stood out by posting a gain of 3.75 percent. The Nifty Midcap Select rose by 0.42 percent, and the Nifty Financial Services index increased by 0.64 percent. However, the Nifty Bank index fell by 0.75 percent, heavily influenced by the decline in IndusInd Bank's stock prices.

Market analysts noted that the initial negative sentiment was reflective of global market trends, which had reacted poorly to economic concerns. Value buying emerged quickly, leading to a recovery in the Nifty index after a weak start. However, the banking sector underperformed largely due to the selloff in IndusInd Bank.

The Indian rupee showed strength against the dollar, appreciating by 0.15 to close at 87.24. This improvement was attributed to weaker crude prices and a softer dollar index. Additionally, the secondary market exhibited resilience, with recovery in the index after a lackluster opening, further supporting the rupee's gains.

Gold prices continued to rise, climbing ₹450 to reach ₹85,900 in the MCX market, and increasing $14 to $2,911 in COMEX. Analysts explained this upward trend as being driven by dollar index weakness and heightened tariff concerns in the U.S., which signals economic uncertainty and spurs safe-haven buying.

Looking at the broader economic landscape, U.S. markets faced significant downturns fueled by fears of recession and trade tensions. Despite this, analysts remain cautiously optimistic about the Indian market, as it appears to be gradually recovering from the global selloff.

Technically, the market shows potential for an upside. Analysts observed positive sentiment in the very short term, with strong momentum suggested by the RSI indicator and the index finishing above the 50 EMA on hourly charts. Projections indicate that the index may exhibit further strength, potentially reaching levels between 22,660 and 22,700.

Analysts emphasized that as long as the market maintains levels above 22,300 and 73,700, the short-term outlook remains constructive. Looking ahead, market participants are anticipated to monitor upcoming inflation data closely. Key inflation reports from both the U.S. and India are expected to influence market sentiment, as projections suggest a decline in inflation rates, which could foster a mildly supportive trading environment.

Markets, Stocks, IndusInd