Indian markets slumped on February 28 as all sectors weakened, mirroring a global equity selloff. Sectoral indices saw broad declines, with the Nifty IT index leading the fall, dropping over 4 percent.
Nifty Auto and Nifty Media indices each declined more than 3.4 percent, while the Nifty Consumer Durables index lost 3.2 percent. Nifty Oil & Gas, Metal, and FMCG indices each fell by 2.4 percent, while Pharma and Realty indices declined nearly 2 percent.
Auto stocks weakened after Nomura projected India’s February retail sales to be among the weakest in recent years, with double-digit declines across segments compared to the previous year. Analysts Kapil Singh and Siddhartha Bera noted that while some recovery may occur following December's discount-driven purchases and subsequent price hikes, the near-term outlook remains weak.
IT stocks declined due to concerns over slowing global economic growth and disappointment from Nvidia Corp.'s earnings, which failed to sustain the artificial intelligence-driven rally.
Global equities also faced pressure after Donald Trump announced that a 25 percent tariff on Canadian and Mexican imports remains scheduled for March 4, along with an additional 10 percent tax on Chinese imports.
According to Christopher Wood, global head of equity strategy at Jefferies, the ongoing selloff in Indian equities is largely technical, driven by multiple compression rather than major macroeconomic concerns. The decline has been concentrated in high-beta domestic cyclical sectors such as property, infrastructure, and industrials, which were last year's top performers.
Despite market volatility, Indian corporate earnings have remained broadly stable. Among the 183 firms tracked by Jefferies, the ratio of earnings upgrades to downgrades stands at 39 percent to 53 percent, reflecting an improvement from the previous quarter’s 31 percent to 62 percent.
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