India's benchmark indices, Sensex and Nifty, hovered in the red by midday on February 20, weighed down by financial stocks as global trade tensions kept investor sentiment subdued. Mid and small caps outpaced the benchmarks. The BSE Midcap index climbed 0.8 percent, while the BSE Smallcap index surged over 1 percent. Despite the rebound, these indices remain significantly off their highs, with mid-caps down 17 percent and small-caps 21 percent from peak levels.
At 11:45 AM, the Sensex was down 180 points, or 0.2 percent, at 75,759, while the Nifty slipped 27 points, or 0.1 percent, to 22,905. On the NSE, 1,874 stocks advanced while 640 declined. So far in 2025, Indian indices have lost over 3 percent and are down nearly 13 percent from their record highs in late September.
The benchmarks had opened lower tracking losses in Asian markets as investors grew wary of U.S. tariff measures and their potential inflationary impact. Worries over slowing earnings growth, expensive valuations, and uncertain U.S. trade policies fueled selling pressure in equities.
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On February 19, Trump announced plans to impose tariffs of 25 percent or more on auto, pharmaceutical, and semiconductor imports. Among Asian economies, South Korea and Japan have the highest U.S. exposure to auto exports, while India has extensive exposure to the U.S. pharma market.
"If this is implemented in early April as Trump declared, it will impact the US, too, through shortages and higher prices. It appears that Trump’s intention is to negotiate and extract concessions before tariffs are imposed," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He added, "A positive news is the RBI indicating growth recovery in H2 FY25. This bodes well for growth and earnings recovery in FY26. Market will start responding positively to the high frequency data indicating growth recovery. Beaten down midcaps like defence stocks are witnessing some buying."
When it comes to sectoral indices, financial stocks led the declines, with Nifty Bank and Nifty Private Bank shedding over half a percent each. Meanwhile, oil & gas and metal indices were the top gainers, rising 1 percent and 1.5 percent, respectively.
The Nifty FMCG index extended its record-breaking losing streak to 14 sessions, erasing Rs 2.7 lakh crore in investor wealth. The rally fueled by post-budget personal income tax benefits has faded, with attention now shifting back to weak demand and margin pressures, CNBC-TV18 reported.
Tobacco stocks plummeted amid reports that the Goods and Services Tax (GST) Council may consider increasing GST rates on cigarettes and other tobacco products. According to the Economic Times, the hike could take effect once the compensation cess on these items is removed. Shares of ITC slipped 1 percent, Godfrey Phillips dropped 5 percent, and VST Industries tumbled 4 percent.
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Hindalco, Shriram Finance, Adani Ports, M&M, and NTPC led the gains on the Nifty 50, climbing 2–3 percent, while Kotak Mahindra Bank, ITC, Tata Consumer, Maruti Suzuki, and HDFC Bank were the biggest drags, slipping 1–2 percent. HDFC Bank, the heaviest-weighted stock on the benchmark indices, dropped 2 percent, snapping a three-day winning streak, with LSEG data showing multiple block trades at a discount.
Maruti Suzuki India declined 2 percent after parent company Suzuki Motor Corp scaled down its electric vehicle roadmap, planning to launch only four battery EVs in India by FY30 instead of the previously targeted six.
RateGain Travel Technologies surged nearly 7 percent after Thailand-based Nok Air partnered with AirGain to refine its pricing strategies, while Palantir Technologies slumped 10 percent following reports that U.S. Defense Secretary Pete Hesgeth plans to cut military spending.
On the technical front, Hardik Matalia, Derivative Analyst at Choice Broking, identified 22,800 as a crucial support level, warning that a breach could extend selling pressure toward the 22,700–22,500 range. He noted that immediate resistance stands at 23,000, with a key hurdle near 23,200.
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