As investors were alarmed by the prospect of a full-scale global trade war and a faltering U.S. economy, the Sensex and Nifty fell over 2 percent on February 28 due to widespread selling. In terms of total market value, the market lost Rs 8.8 lakh crore. Each BSE Smallcap and BSE Midcap index fell more than 2 percent, while all 13 of the key sectoral indices saw significant losses. Half of the losses on the Nifty 50 were in the financial and IT industries, where foreign investors have substantial holdings.
Citing the ongoing flow of lethal pharmaceuticals into the United States, US President Donald Trump declared on February 27 that his proposed 25% tariffs on goods from Mexico and Canada, combined with an additional 10% charge on Chinese imports, will go into effect on March 4.
The Nifty fell 418 points to 22,126 by the close, and the Sensex fell 1,420 points to 73,192. With only 400 equities rising and an astounding 2,221 falling, the market’s overall scope on the NSE presented a glaringly dismal picture. For the fifth consecutive month, the benchmarks closed lower, marking the longest losing run in 29 years. The benchmarks have fallen 18% from their peak due to a mix of worries about slowing economic growth, waning earnings momentum, Trump’s trade plans, and persistent selling by foreign investors.
International institutional investors have sold Indian stocks for a total of Rs 47,349 crore so far in February, while domestic institutional investors have replaced them with net purchases totaling Rs 52,544 crore.
IT stocks saw the most sectoral devastation, with the index falling more than 4% as worries about a slowing economy were stoked by U.S. jobless claims data. The IT index has lost around 8% so far this week, significantly more than the Nifty 50’s overall fall of more than 2%.
The Nifty Bank index fell 0.8 percent as 11 of its 12 components ended lower, indicating that banking companies also suffered. Nifty PSU Bank, Nifty Healthcare, Nifty Oil & Gas, Nifty Auto, Nifty FMCG, and Nifty Media all had declines of 2-4 percent.
