Mumbai, February 28 – Indian stock markets tumbled sharply on Wednesday as investor sentiment took a hit following fresh tariff announcements by U.S. President Donald Trump. The Sensex nosedived 960 points, or 1.3%, to 73,652, while the Nifty fell 300 points, or 1.3%, to 22,244 by midday. A broad-based selloff swept across the market, with all 13 major sectoral indices trading in the red.
Smallcap and midcap stocks bore the brunt of the selling pressure, with the BSE Smallcap and BSE Midcap indices plunging over 2% each. IT and financial stocks, where foreign investors hold significant stakes, accounted for half of the Nifty 50’s losses.
Trump’s Tariff Shock Hits Global Markets
On Tuesday, Trump announced new trade tariffs, escalating global trade tensions. The U.S. will impose a 25% tariff on Mexican and Canadian goods starting March 4, along with an additional 10% duty on Chinese imports. This move comes on top of a 10% tariff imposed on February 4 over the fentanyl crisis, effectively raising the total duty on Chinese imports to 20%.
Market experts believe that the heightened trade tensions have spooked investors, leading to a risk-off sentiment in global equity markets. “Stock markets dislike uncertainty, and uncertainty has been on the rise ever since Trump was elected the U.S. president,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “The spate of tariff announcements has been impacting markets, and the latest hike on Chinese goods confirms that Trump will use trade negotiations aggressively to push for favorable U.S. settlements.”
Broader Market Weakness and Foreign Selling
Market breadth was overwhelmingly negative, with just 260 stocks advancing against 2,291 declining on the NSE. The Nifty 50 index has fallen more than 4% so far in February and is on track for its fifth consecutive monthly loss—the longest losing streak in 29 years. The benchmark indices have slipped nearly 14% from their record highs in late September.
Persistent concerns over slowing economic growth, fading corporate earnings momentum, and aggressive foreign investor selling have kept pressure on the markets. Foreign institutional investors (FIIs) have been net sellers in Indian equities throughout February, further exacerbating the downward pressure on key indices.
What Lies Ahead?
Analysts expect continued volatility in the near term as investors assess the implications of U.S. trade policies and global economic growth prospects. Additionally, upcoming macroeconomic data and central bank actions will be closely watched. Market participants remain cautious ahead of key events, including GDP growth data and further developments on the global trade front.
With uncertainty still looming, investors may need to brace for heightened market swings in the coming weeks.
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