On February 28, 2025, the Indian stock market is set for fluctuational moments as several factors bear down on investor sentiment. The country’s Q3 GDP data, persistent selling by foreign institutional investors (FIIs), fresh tariffs announced by US President Donald Trump, and prevailing weak global cues collectively promise to steer the market.
At 6:50 AM IST, GIFT Nifty Futures indicated a downturn, dropping 148 points to reach 22,536, hinting at a potential gap-down start for India's key indices. This follows the previous session, where India’s benchmark index, the Sensex, concluded just slightly higher at 74,612.43, up by only 0.01%. Conversely, the Nifty50 saw limited movement, ending down by 0.01% at 22,545.05.
Today's trading session follows the conclusion of the BS Manthan summit, which took place over two days, focusing on India’s economic and business directions. Prominent leaders, including Samir Arora from Helios Capital, Sunil Vachani of Dixon Technologies, and Ajai Chowdhry of HCL, addressed key discussions centered on the nation's growth outlook.
From the international perspective, the Asian markets experienced turbulence on Friday following President Trump’s reaffirmation to impose tariffs on imports from Mexico and Canada, commencing on March 4, 2025. The Nikkei slipped by 2.76%, the Topix fell by 1.96%, the ASX 200 declined by 0.67%, and the Kospi decreased by 2%. Concern is mounting as Trump’s tariffs add to existing pressures, particularly against China, which is also set to be hit with additional tariffs.
Back on the domestic front, India's economy is anticipated to show recovery with projected growth of 6.3% for the last quarter, according to economists surveyed by Reuters. Increased government spending is expected to play a pivotal role, compensatory against weakened household consumption trends. On February 27, FIIs net sold shares worth Rs 556.56 crore, whereas domestic institutional investors (DIIs) countered this with net purchases amounting to Rs 1,727.11 crore.
Turning to the public offerings scene, the IPO market is buzzing with activity as February 28 sees the launch of Swasth Foodtech and HP Telecom IPOs on the bourses. Meanwhile, the Balaji Phosphates IPO is set to open for subscription, and the Shreenath Papers IPO is now entering its third day. All eyes are also on the Nukleus Office IPO, where allocations will soon be announced.
Despite the recent market corrections, some analysts remain cautiously optimistic about the recovery potential for Indian equities. Chris Wood, head of equity strategy at Jefferies, expressed the perspective of short-term foreign investment favoring China over India due to recent valuation issues and foreign outflows. Still, he envisions potential returns of 10-15% for Sensex and Nifty indices if foreign investors resurface.
Today’s trading performances are also shaped by significant changes within regulatory bodies. Tuhin Kanta Pandey has been appointed the new chairman of the Securities and Exchange Board of India (SEBI), effective March 1, succeeding Madhabi Puri Buch. SEBI has approved the introduction of specialized investment funds (SIFs) starting April 2025, with new offerings required to be deployed by mutual funds within 30 business days.
On the sideline, the commodity markets witnessed gold prices dipping to their lowest point in two weeks, falling 1.1% to $2,885.13 per ounce, prompted by the strengthening US dollar and anticipation for upcoming key inflation data. Conversely, oil prices surged more than 2%, attributed to President Trump’s recent decisions which include revoking Chevron’s operation license in Venezuela.
Market analysts like Rupak De from LKP Securities pointed out, “On the lower end, 22,500 continues to act as support, similar to how 22,800 did days ago. We expect Nifty to decline toward 22,200 and lower if it plunges beneath 22,500.” On the upper range, 22,650 is seen as immediate resistance. “The index is likely to remain ‘sell on rise’ as long as it stays below 22,750-22,800,” he indicated.
Adding to these thoughts, Shrikant Chouhan from Kotak Securities mentioned, “We believe 22,600/74,800 will serve as key resistance for short-term traders; above this, the market could continue to pull back to levels of 22,700-22,800/75,000-75,300. A fresh sell-off may only materialize after breaching 22,500/74,500.”
The Nifty IT index continues to show signs of struggle, marking its sixth straight session of decline amid uncertainty stemming from the global economic outlook. The IT heavyweights, including Tata Consultancy Services, Infosys, and HCL Technologies, saw metaphorical falls of 0.47%, 0.19%, and 0.42% respectively, as market sentiment reflects caution about potential impacts from tariff implementations.
Brokerage JM Financial pointed out broader themes of instability, noting, “A trade war seems imminent… Inflation in the US has pushed out Fed rate cut hopes and dragged consumer confidence. Such uncertainty affects demand for IT services.” They have highlighted TCS and Infosys as having earning resilience amid such unsettling market conditions.
Overall, as the market prepares to tackle various headwinds from both international developments and domestic agendas, investors tread lightly, waiting for cues from earnings reports and broader geopolitical signals to ascertain the next direction for their portfolios.