Freaky Friday: Sensex Tanks 1,414 Points, Nifty Below 22,200; IndusInd Bank Down 7% – News18
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Benchmark equity indices BSE Sensex and Nifty50 opened lower on Friday, February 28, 2025, in response to mixed global cues.
BSE Ltd price crash by 11%.
Sensex Crash Today: Equity benchmark indices faced intense selling pressure on Friday, driven by weak global cues following U.S. President Donald Trump’s vow to impose tariffs on Canada and Mexico starting March 4. Trump also escalated tensions by threatening China with an additional 10% tariff.
The BSE Sensex had a rough session, opening with a sharp negative gap of around 400 points. It then tumbled to a low of 73,141 before finishing the day down 1,414 points, or 1.9%, at 73,198.
As a result, the Sensex closed the week with a loss of 2,113 points, or 2.8%, and saw a significant monthly decline of 4,303 points, or 5.6%, for February 2025. The index has now shed nearly 15% from its all-time high of 85,978.
Meanwhile, the NSE Nifty 50 followed suit, plunging to a low of 22,105 before closing down 420 points, or 1.9%, at 22,125. The Nifty lost 5.9% in February and has fallen almost 16% from its record high of 26,277. If the index drops by 20% from its peak, it will officially enter bear market territory.
The selloff was widespread across sectors, with IT and Auto stocks taking the hardest hit. IndusInd Bank was the biggest loser, dropping 7%. Other major decliners included Tech Mahindra, Mahindra & Mahindra, Bharti Airtel, Tata Motors, Titan, Infosys, and Nestle India, all of which lost between 4% and 6%. Out of the 30 Sensex stocks, 27 ended the day with declines of over 1%, while HDFC Bank, up 2%, was the sole gainer.
In the broader market, both the BSE MidCap and SmallCap indices fell over 2%. The BSE SmallCap index recorded its largest monthly loss in five years. Market breadth was overwhelmingly negative, with roughly five stocks declining for every advancing stock on the BSE.
Out of the 4,081 stocks traded on the BSE, 3,248 ended the day in the red, while just 742 posted gains. A total of 476 stocks hit their lower circuit limits, while 106 reached upper circuit limits.
All sectoral indices closed in the red, with losses exceeding 1% each. The BSE IT and Auto indices were hit hardest, dropping around 4% each. Other sectors like FMCG, Healthcare, Capital Goods, Consumer Durables, and Oil & Gas also saw declines of more than 2% each.
Dr. V K Vijayakumar, the chief investment strategist at Geojit Financial Services, stated that stock markets typically dislike uncertainty, and such uncertainty has increased since Donald Trump’s election as the US president. He explained that the series of tariff announcements made by Trump has been affecting markets, with the recent confirmation of a 10% tariff on China further reinforcing the market view that Trump would use the early months of his presidency to impose tariffs on countries and then negotiate settlements favorable to the US.
Vijayakumar noted that how China responds to these tariffs remains to be seen, and while markets have not fully discounted a potential trade war between the US and China, it is likely to be avoided. However, the uncertainty has risen, as evidenced by the sharp spike in the CBOE volatility index to 21.13.
Looking ahead to March, Dr. Vijayakumar expects a recovery in the Indian market, driven by better macroeconomic news and subdued foreign institutional investor (FII) selling. He mentioned that with large-cap valuations being fair and attractive in certain areas, FIIs are unlikely to be as aggressive in their selling during the final months of the financial year. Long-term investors, he suggested, could use the market weakness to accumulate fairly-valued quality large-cap stocks and select stocks in the broader market, such as defense stocks.
Global Cues
Global markets were facing a sharp decline on news that US President Donald Trump confirmed tariffs against Canada and Mexico would take effect next week. On Thursday evening, Trump announced that tariffs on both countries would be imposed starting March 4, with China facing an additional 10% tariff on the same date. Trump also warned of a potential 25% tariff on imports from the European Union in the near future.
As a result, Asian markets saw significant losses, with Japan’s Nikkei dropping 2.7%, South Korea’s Kospi falling 2.2%, and Australia’s ASX200 declining 0.7%.
Overnight, US stock markets also closed lower, with the S&P 500 falling 1.59%, the Nasdaq Composite plunging 2.78%, and the Dow Jones Industrial Average slipping 0.45%. The Nasdaq’s weakness was further exacerbated by an over 8% drop in Nvidia’s shares.
