All eleven sectoral indices were down, with the exception of Nifty Pharma and Nifty Healthcare. Infosys and TCS were the biggest drags on Nifty IT, which fell more than 2 percent.
As U.S. stocks fell overnight due to worries about softening consumer demand and tariff fears, the Indian benchmark indices, the Sensex and Nifty, began lower on February 24. Investor concerns were heightened in February when U.S. consumer sentiment fell to a 15-month low and inflation forecasts skyrocketed as a result of President Donald Trump’s proposed tariffs. In the face of mounting economic uncertainty, Wall Street’s losses were mirrored by the majority of Asian markets.
The Nifty 50 down 205 points, or 0.9 percent, to 22,590 at 9:50 AM, while the Sensex was down 690 points, or 0.9 percent, at 74,619 at same time. Fears of slowing profit growth and rising trade tensions have caused both indexes to drop more than 13 percent from their record highs in late September 2024. 348 shares rose and 2,069 shares fell on the NSE.
“Continuous FII selling and worldwide uncertainty over Trump tariffs are posing challenges to the market. Another short-term obstacle is the steep increase in Chinese stocks, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “The ‘Sell India, Buy China’ trade may continue for some time since Chinese stocks continue to be attractive.”
“The anticipated rate cut by the Fed is unlikely to occur since long-term inflation expectations are rising in the US. The US stock markets could be impacted if the Fed becomes more hawkish. FIIs may stop selling in India and maybe start purchasing again if this occurs and US bond yields begin to drop. “The situation is very uncertain in the near future,” Vijayakumar continued.
For India’s export-driven industries, especially IT, stagflation—characterized by slower growth and rising prices—in the largest economy in the world is concerning. Foreign investors may turn to safer assets like the dollar and U.S. treasuries as a result, making India and other emerging markets less appealing.
The BSE Midcap and BSE Smallcap both fell 1.6% and more than 2%, respectively, as the broader markets underperformed. “One good thing about our market is that large caps’ valuations have become reasonable and appealing in several sectors, such as finance, which presents chances for long-term investors to purchase. “There are opportunities in select stocks in this segment, despite the fact that the valuations of the broader market remain high,” Vijayakumar said.
All eleven sectoral indices were down, with the exception of Nifty Pharma and Nifty Healthcare. Infosys and TCS were the biggest drags on Nifty IT, which fell more than 2 percent.
Following the expiration of its three-month shareholder lock-in period, shares of NTPC Green Energy, the company’s freshly listed subsidiary, fell 8%, prolonging losses for a second consecutive session.
Selling pressure affected the Sensex and Nifty last week, especially in financial and auto stocks. Investor anxieties were exacerbated by a steep sell-off on Wall Street, worries about Trump’s tariffs, ongoing inflation in the United States, and the Fed’s cautious approach to rate decreases. In the meantime, a change in foreign capital flows brought about by a resurgent demand for Chinese stocks worldwide has put additional pressure on Indian stocks.
