On Friday, February 28, 2025, Indian stock markets experienced significant turmoil, with the benchmark indices, Sensex and Nifty, suffering sharp declines following concerns over U.S. tariffs and broader global economic uncertainties. The BSE Sensex plummeted by 952.39 points, or 1.28 percent, to close at 73,660.04, marking one of the sharpest drops seen recently. Meanwhile, the Nifty 50 index fell 282.45 points, or 1.25 percent, closing at 22,265.05, reflecting the broader market's struggles.
Market analysts attributed this sharp downturn to several interlinked factors. Chief among them was the looming uncertainty surrounding U.S. President Donald Trump's latest tariff announcements, which include new tariffs on imports from both Mexico and Canada, set to take effect on March 4, and additional levies on Chinese goods. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, "Stock markets dislike uncertainty, and uncertainty has been on the rise ever since Trump was elected U.S. president." He emphasized the market's negative response to Trump's tariffs, indicating they compound fears of all-out trade war between the U.S. and China.
IndusInd Bank, Tata Steel, and HCLTech were among the top losers during Friday’s trading, with IndusInd Bank experiencing the most significant defeat, down by 6.18 percent. Overall, the market's decline led to the reduction of the total market value of BSE-listed firms by around Rs 5.8 lakh crore, diminishing it to Rs 387.3 lakh crore, according to reports.
Investors were also on edge as they awaited important domestic GDP figures for the current fiscal year, fueling caution around market movements. Economic growth apprehensions were reflected as the market has already retreated approximately 14 percent from peak levels recorded late last year. Adding to the pressure, reports indicated persistent selling from Foreign Portfolio Investors (FPIs), who have withdrawn approximately Rs 1.137 lakh crore from the market since the beginning of the calendar year.
A broader picture revealed negative sentiments across global markets, where Asian stocks also fell sharply following Trump's commitment to tariffs. The overnight drop of 8.5 percent for Nvidia, which influenced the U.S. markets, was noted to have created added losses for Asian investors. The Nifty IT index, particularly, was severely affected by this, declining 3.2 percent as sentiment soured over tech investments.
Ajit Mishra of Religare Broking commented on the current market conditions, stating, "The past two sessions reflect indecision, likely due to oversold conditions." He viewed the heavy selling pressure across key sectors as limiting any potential recoveries.
While there seems to be little immediate hope for stabilization, some market experts believe recent declines might pave the way for potential rebounds. Vijayakumar remarked, "March is likely to witness recovery supported by improved macro data and reduced FII selling," providing some optimism among investors. Still, he advised long-term investors to take advantage of current market weaknesses to acquire valuable large-cap stocks.
With global dynamics shifting and uncertainty prevailing, the Indian market remains on edge, weighing not only the impacts of domestic economic Reports but also global financial shifts triggered by U.S. policy decisions. Those watching the markets are advised to monitor the outcomes closely, especially with March GDP data on the horizon.
The decline observed on February 28 highlights the vulnerability of the Indian stock markets to global influences, leaving many investors questioning the best course of action amid these turbulent times. Analysts continue to caution their clients to remain cautious as the full ramifications of U.S. trade policies will be felt across sectors well beyond mere investor sentiment.