India's benchmark indexes slumped to their lowest levels in eight months, down 0.9 percent by noon on February 24, as heavyweight financial and information technology stocks dragged markets lower as concerns over slowing U.S. growth rattled investors.
At 11:40 AM, the Sensex had plunged 700 points, or 0.9 percent, to 74,613, while the Nifty tumbled 200 points to 22,595. Both indexes have now lost over 13 percent from their record highs in late September 2024, weighed down by fears of slowing earnings growth and escalating trade tensions. Market breadth remained weak, with 652 stocks advancing while 1,922 declined on the NSE.
Prashanth Tapse, Senior VP (Research) at Mehta Equities, pointed to weak Asian cues and a sharp fall in U.S. markets on February 21, along with Trump's retaliatory tariff threats and persistent foreign fund outflows, as key drivers of the downturn. "There are fears that the US is returning to stagflation, which could hurt global growth prospects, already undergoing a slowdown phase, he said.
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Tapse noted that from an intraday perspective, Nifty would need to close above the psychological 23,000 mark to confirm strength. "Further, with an inter-month perspective, Nifty can gain strength if it breaches its biggest hurdle at 24,067 mark which is also the benchmark’s 200 DMA (Day Moving Average)," he added.
The benchmarks have been under pressure for most of February, logging declines in 15 out of 17 trading sessions. Consistent foreign outflows, uncertainty over U.S. trade policies, and concerns about domestic economic momentum have kept investors on edge. Foreign institutional investors (FIIs) have net sold Indian equities worth Rs 36,977 crore so far this month, while domestic institutional investors (DIIs) have countered the selling, net buying shares worth Rs 42,601 crore.
The latest sell-off follows weak economic data from the U.S., where business activity tumbled in February, signalling growing uncertainty among businesses and consumers over Trump’s policy moves.
In the broader market, both the BSE Midcap and BSE Smallcap indexes lost nearly 1 percent each.
11 of the 13 major sectoral indices traded in the red, with Nifty IT and Nifty Bank bearing the brunt of the selling. Nifty IT plunged 2.3 percent, dragged down by Infosys and TCS, as foreign portfolio investors, who have significant exposure to the sector, offloaded shares. Slowing U.S. growth is a major headwind for Indian IT firms, given their high revenue dependency on the world's largest economy.
Nifty Pharma and Nifty FMCG were the only sectoral gainers, rising 0.2 percent and 0.1 percent, respectively.
Among the top losers on the Nifty 50, Trent, TCS, Infosys, HCLTech, and Wipro dropped 2-3 percent. On the other hand, Tata Consumer, M&M, Eicher Motors, Nestle, and Dr. Reddy’s were among the top gainers, rising 0.5-1 percent.
Shares of NTPC Green Energy, the recently listed subsidiary of NTPC, plunged 7 percent, extending its losing streak for a second straight session as the expiry of its three-month shareholder lock-in period triggered a wave of selling.
InterGlobe Aviation continued its rally for a sixth consecutive session, climbing to Rs 4,543 per share, marking a 7 percent gain over the period. Citi analysts placed the stock on a 90-day positive catalyst watch, raising the target price to Rs 5,200 from Rs 5,100 while maintaining a "buy" rating.
Healthcare Global Enterprises rose 3 percent after private equity firm KKR announced plans to acquire a $400 million stake in the company.
"In light of the shortened monthly expiry week and the prevailing global uncertainties, we can expect an uptick in market volatility," Angel One noted in a report..
Last week, the Sensex and Nifty struggled under selling pressure, particularly in auto and financial stocks. A sharp sell-off on Wall Street, concerns over Trump’s tariffs, persistent U.S. inflation, and the Fed’s cautious stance on rate cuts all contributed to investor jitters. Meanwhile, a renewed global appetite for Chinese stocks has led to a shift in foreign fund flows, further weighing on Indian equities.
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