Taking Stock | Sensex, Nifty fall 0.7% amid Trump's tariff threats, extend decline to four days

markets

Indian markets experienced a sharp decline on February 10, shedding over 0.7 percent, in line with losses across most Asian markets. Investor sentiment remained cautious following US President Donald Trump's commitment to imposing tariffs on imports, raising concerns over potential disruptions in global supply chains.

At closing, the benchmark Sensex dropped 0.7 percent, or 548 points, settling at 77,311.80, while the Nifty50 index declined by 0.76 percent, or 178.35 points, to 23,381.60. This was the fourth straight session when both benchmark indices Sensex and Nifty dropped.

Investor anxiety intensified after reports surfaced that a 25 percent levy on steel and aluminum imports. This added to market uncertainty ahead of Federal Reserve Chair Jerome Powell’s semi-annual Congressional testimony and a possible announcement by Trump regarding reciprocal tariffs on multiple trading partners.

Powell's testimony comes at a time when officials have signaled no urgency to ease monetary policy further. Additionally, upcoming inflation data this week could reinforce this stance, potentially supporting market expectations of just one US interest rate cut this year.

Outlook for February 11

Vinod Nair, Head of Research, Geojit Financial Services

The US tariff threats continued to impact the market sentiment. Domestic yield is inching higher as investors stay cautious on riskier assets and navigate their investments to safe haven assets like gold. On the earnings front, the companies are facing downgrades in estimates due to a weak demand environment, margin pressure, and a cautious near-term outlook.

Rupak De, Senior Technical Analyst at LKP Securities

The decline continues in the headline index as it has been falling after forming a lower top on the daily chart. Sentiment has weakened further after Nifty dropped below the 21EMA. Additionally, the RSI has entered a bearish crossover. In the short term, the trend may worsen below 23,350, with the potential to fall toward 23,000 if it sustains below this level. On the higher end, resistance is seen at 23,550.

Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities

Rupee hit another all-time low of 87.95 against the dollar in early trading, witnessing a sharp 0.55% drop. However, buying interest emerged as the rupee neared the 88.00 mark, leading to a partial recovery towards 87.47 by mid-session. The continued outflow of funds post-budget and RBI policy weighed on sentiment, as neither event provided any substantial reforms or structural shifts beyond higher tax slabs for retail and a minor rate cut from the RBI. With ongoing capital outflows, global trade tensions, and a strong dollar, rupee volatility is expected to persist in the 87.25 - 88.00 range.