Sensex and Nifty tumbled deep into the red around noon on February 21, dragged down by financial and auto stocks, as concerns over U.S. tariffs continued to weigh on investor sentiment. The broader markets, which had started in positive territory, also slipped into the red.
At 11:20 AM, the Sensex tumbled 500 points, or 0.7 percent, to 75,237, while the Nifty 50 slipped 150 points, or 0.7 percent, to 22,763. On the NSE, 940 stocks advanced, while 1,579 declined. From their peak levels in September 2024, the Sensex has now dropped 12 percent, while the Nifty has lost 13 percent.
"In the context of Trump’s tariff threats the market is negatively responding to potential tariff targets like autos and pharmaceuticals and looking for opportunities in domestic consumption plays which will not be impacted by tariff threats," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"This is likely to be a short-term trend since Trump’s strategy is to threaten with tariffs and then negotiate for tariff reduction on US exports. It will take time for this to play out," he explained.
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Vijayakumar added that higher U.S. import tariffs could fuel inflation, prompting hawkish comments from the Federal Reserve and rattling the U.S. stock market. "Trump will not like this outcome and, therefore, he is using the interim period to negotiate with trading partners."
Amid renewed interest in Chinese stocks—now rebounding from depressed levels—Vijayakumar expects Foreign Institutional Investor (FII) selling in India to persist.
"FII selling will continue to put pressure on largecaps. This is an opportunity for long-term investors. Select midcaps like in the defence sector which have corrected and are fairly valued now are likely to witness buying since they don’t face the threat of FII selling," he said.
Foreign institutional investors (FIIs) have offloaded Indian equities worth Rs 33,527 crore so far this month.
In the broader market, the BSE Smallcap index dipped 0.5 percent, while the BSE Midcap index declined 1 percent.
Among sectoral indices, all except Nifty Metal traded in the red. Nifty Auto led the decline, slipping over 2 percent, dragged down by losses in M&M, Tata Motors, and Maruti Suzuki. The Nifty Auto index has now slumped nearly 6 percent in February.
Nifty Pharma, Healthcare, and PSU Bank also posted sharp losses, falling over 1 percent each.
Also Read | Private sector activity rises to six-month high of 60.6 in February
On the Nifty 50, Tata Motors, BEL, BPCL, UltraTech Cement, and M&M were the biggest laggards, tumbling 2-6 percent. Meanwhile, Tata Steel, Eicher Motors, NTPC, Shriram Finance, and Hindalco emerged as the top gainers, rising 0.5-1 percent.
Shares of JSW Energy climbed 7 percent, extending their winning streak to a fourth consecutive session after global brokerage Morgan Stanley reaffirmed its ‘overweight’ rating on the stock with a price target of Rs 545. The target implies a potential upside of 16.5 percent from the last close of Rs 468. Despite the recent rebound, JSW Energy has had a rough start to 2025, shedding 27 percent year-to-date.
Shares of Religare Enterprises surged over 3 percent after the Burman family secured majority control of the company and was officially designated as its promoter. The development follows the Burmans' Rs 2,116 crore open offer to acquire an additional 26 percent stake in Religare Enterprises, which saw a lukewarm response. According to open offer data, only 0.07 percent of equity was tendered against the 26 percent stake on offer. Despite the weak participation, the Burman Group's ownership in Religare Enterprises now stands at 25.16 percent, solidifying its control over the company.
L&T Technology Services soared 4 percent after global brokerage firm Macquarie upgraded the IT stock to ‘Outperform’ from ‘Underperform,’ citing improved valuation and potential growth catalysts. The brokerage raised its target price to Rs 6,530 per share, implying a 33 percent upside from previous closing levels.
Technical analysts at Axis Securities highlighted 22,883 as a key trend-deciding level for Nifty 50. With the index slipping below this mark, they now anticipate profit-booking and a potential correction toward 22,700.
However, if Nifty manages to reclaim 22,883, Axis Securities sees further upside toward 22,954–22,994–23,065 levels.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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