Market Wrap, February 28: Bloodbath on Dalal Street; SENSEX, NIFTY50 plunge almost 2% on tariff jitters

Joining the global indices, the Indian stock market witnessed a bloodbath on Friday, February 28. Worried investors amid fresh tariff announcements by the US led to heavy selling in the equity benchmark indices. The indices plunged nearly 2%.

At close, the S&P BSE SENSEX stood at 73,198.10, plunging 1,414.33 points, or 1.9%, while the NSE's NIFTY50 index settled at 22,124.70, down 420.35 points, or 1.86%.

The NIFTY50 index ended February 2025 in the red, its fifth consecutive month of decline. This marks the longest losing streak for the NIFTY50 in 28 years.

The key reasons behind the ongoing market rout include record selling by foreign institutional investors (FIIs), expensive valuations of Indian equities, disappointing December quarter earnings and uncertainty about trade tariffs imposed by US President Donald Trump.

The market investor also remained cautious ahead of India’s GDP numbers for the third quarter.

The broader market also saw heavy selling and lost almost 3% at the end of the trading session. Post-COVID, this is the biggest monthly fall in midcap and small-cap.

There was heavy selling on the IT, auto and banking counters on Friday.

In the last five months, foreign institutional investors have sold shares worth ₹2,11,070 crore. This is the highest amount of selling ever done by the FIIs, data from the National Securities Depository Limited (NSDL) showed. Analysts say that domestic institutional investors have absorbed the intense selling by FIIs.

According to market veteran AK Prabhakar, corrections were quite common before 2008, and Indian markets witnessed corrections every four years.

"The Nifty has corrected only 14% now, but in 1996 the correction was much deeper, as the markets were not in a euphoric mood back then. Investors had just seen the Harshad Mehta scam in 1994. Given today's scenario, the correction has just started, and there are a lot of excesses. Further, the global markets have still not seen a correction," he said.

Globally, among the Asian markets, Seoul, Tokyo, Shanghai and Hong Kong were trading with deep cuts.

The US markets also ended sharply lower on Thursday, weighed down by a slump in chipmaker Nvidia after its quarterly report failed to rekindle Wall Street's AI rally, while investors focused on data pointing to a cooling US economy.

The S&P 500 dropped 1.59% to end the session at 5,861.57 points, while the Nasdaq tumbled 2.78% to 18,544.42 points, and the Dow Jones Industrial Average declined 0.45% to 43,239.50 points.

Nvidia tumbled 8.5%, evaporating $274 billion in stock market value, after the Silicon Valley company gave a weaker-than-expected quarterly forecast for gross margin that overshadowed an upbeat revenue outlook.

Since October 2024, SENSEX has declined 5.83%, while NIFTY50 has fallen 6.2%.

As many as 2,972 stocks traded on the NSE on Friday. Out of this, 2,416 declined and only 489 stocks advanced, while 67 scrips remained unchanged.

A total of 8 stocks hit their 52-week highs, while 789 stocks touched their one-year lows. Besides, 29 stocks hit their upper circuit limits, and 318 touched their lower circuit bands on Friday.

On the broader market front, the NIFTY Midcap 100 and NIFTY Smallcap 100 fell 2.49% and 2.49% on Friday, respectively, after losing more than 10.7% and 13% in February. This steep fall of over 13% in a month is the most brutal fall the index has witnessed in five years.

All the sectoral indices closed lower on Friday with Nifty IT being the biggest loser, declining 4.18% followed by Nifty Auto (-3.92%), Nifty Midsmall IT and Telecom (-3.72%), Nifty Financial Services Ex-Bank (-3.72%) and Nifty Media (-3.48%).

As many as 45 stocks on the NIFTY50 index traded negative, while the only 5 closed in green. The biggest laggards on the index were IndusInd Bank, Tech Mahindra, Wipro, Bharti Airtel and Mahindra and Mahindra (M&M), declining as much as 7.11%.

On the flip side, the top five gainers were Shriram Finance, HDFC Bank, Coal India, Trent and Hindalco, contributing as much as 2.01% on the 50-share index.