Tale of the Tape 

Hello everyone. Markets had a rough day (again!).

Nifty and Sensex dropped nearly -2% each; ending the month of February with losses of almost -6%. Weak global cues triggered by Trump’s tariff threats + constant FII selling continue to dent sentiment. Midcap (-2.5%) and Smallcaps (-3%) were taken to the cleaners. The market breadth remained weak with over 4 stocks falling for every gainer.

Not a single sector closed in the green. IT (-4.2%) and Autos (-3.9%) got beaten up the most. PSU Banks (-2.8%) and FMCG (-2.6%) also witnessed deep cuts. Check out the Stocktwits Sentiment Meter:

Nifty ends February in the red, its fifth straight month of losses. Read our top story to understand when this awful drawdown may end.

Is the Indian hotel sector's upcycle set to continue for the next few years? More details below along with Yes Securities's top picks.

Coal India was up +2% after announcing a Rs 300 p/ton price hike. This would result in Rs 3,878 cr in additional revenue 

Granules dropped -8% intraday after the USFDA issued a warning letter for its Gagillapur facility. 

Indigo’s (+1%) market share hit a record high of 65.2% in Jan 2025, according to latest data. 

Premier Energies tumbled -5% after its share lock-in period ended. Reports claim that 10.6 crore shares (23% of equity) are eligible for trading now! 

Afcons Infra fell -6% after tax officials raided their offices.

Here are the closing prints:

Markets
Max Pain Ahead! 🤕

Nifty has officially posted its worst monthly losing streak in 29 years! FYI - roughly Rs 85 lakh cr in investor wealth has been wiped off since the index’s September highs. We know what you’re thinking: how much longer is this f*cking pain gonna last? 

The good news is that historical patterns offer some clues. The bad news is that it’s not definitive. Consider the median drawdown of all NSE-listed stocks right now. The folks at Capitalmind estimate that the universe of all stocks is down -43% from their peak. This sounds bad, BUT we’ve seen worse drawdowns in 2009, 2013 and of course 2020.

More importantly: drawdowns are correlated to 1-year forward returns. For example, negative returns are likely 70%-80% of the time when broader markets are only down 15%-20% from their peaks. On the flipside, when all NSE listed stocks slip more than -60% on average, then the 1-year forward returns have historically been positive. The problem? We’re currently only at ~43%, right dab in the middle, which Capitalmind says means a 40% probability of further decline. Put simply, the chances are there will be more pain before recovery.

FYI -  this doesn’t mean you can’t start looking to pick up some cheap stocks. Roughly one-third of NSE 500 stocks are cheaper than pre-Covid valuations! Several bluechip stocks are 10%-60% below their March 2020 levels in terms of valuations.

TLDR: If you’re investing for the long-term, this doesn’t matter. SIPs exist so you don’t have to time the market; in fact increasing them is probably a good idea. For those looking to buy only at the bottom, you’re probably going to have to wait a little while more.

*only companies with more than Rs 100 cr market cap are considered in this analysis.