Bourses continue downward trade in early afternoon session

Indian equity markets continued their downward trade in early afternoon session tracking weakness in other Asian markets. Domestic traders were cautious ahead of the release of India’s domestic Gross domestic product (GDP) data, which will due later in a day. Investors grappled with U.S. President Donald Trump’s fresh tariff threats. Traders paid no heed towards National Council of Applied Economic Research’s (NCAER) monthly economic review stating that moderation in inflation to five-month low of 4.3 per cent in January has provided Reserve Bank of India (RBI) more space to cut interest rate in policy meet. Sector wise, automobile industry remained in focus as ICRA in its latest report has said that passenger vehicle sales volume in India is expected to grow at a moderate pace of 4-7 per cent in FY26 with most demand drivers remaining neutral or favourable. 

On the global front, all Asian markets are trading lower despite value of retail sales in Japan was up a seasonally adjusted 0.5 percent on month in January. That was in line with expectations following the 0.8 percent decline in December. 

The BSE Sensex is currently trading at 73603.23, down by 1009.20 points or 1.35% after trading in a range of 73538.95 and 74282.43. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 2.62%, while Small cap index was down by 2.79%.

The top losing sectoral indices on the BSE were IT down by 3.79%, TECK down by 3.52%, Telecom down by 3.18%, Auto down by 3.10% and Consumer Durables was down by 2.75%, while there were no gaining sectoral indices on the BSE. 

The few gainers on the Sensex were HDFC Bank up by 1.23% and Axis Bank was up by 0.91%. On the flip side, Indusind Bank down by 5.37%, Tech Mahindra down by 5.36%, Titan Company down by 4.38%, Mahindra & Mahindra down by 3.76% and Maruti Suzuki was down by 3.69% were the top losers.

Meanwhile, Global Trade Research Initiative (GTRI) has said that India should push for inclusion of protective provisions in its proposed free trade agreement (FTA) with the European Union to safeguard its interests against the EU's carbon tax. The EU has decided to impose Carbon Border Adjustment Mechanism (CBAM), or carbon tax, which will come into effect from January 1, 2026. It would mainly impact seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products.

GTRI has said that if protective language is not included in the agreement, post FTA, EU goods will enter India duty-free, while Indian steel and aluminum could face high carbon charges under CBAM when exported to the EU. It said since CBAM imposes tariffs based on production methods, it violates WTO (World Trade Organisation) rules. India must push for protective language in the FTA to address this issue. 

The suggestions came at a time when European Commission President Ursula von der Leyen, accompanied by the EU College of Commissioners or senior political leaders of the bloc, began a high-profile two-day visit to India on February 27, 2025. The issue is expected to figure in the meetings between the two sides. So far nine rounds of talks have been completed between India and the European Union (EU) on the proposed agreement. The 10th round of talks are scheduled from March 10, 2025 to March 14, 2025. 

In June 2022, India and the EU resumed the negotiations after a gap of over eight years. It was stalled in 2013 due to differences over several issues. In December last year, the commerce and industry ministry said that the proposed trade agreement negotiations need political directions to reach a commercially meaningful deal while understanding each other's sensitivities. In the pact, the EU is looking at duty cuts on products such as automobiles, wines and whiskey.

The CNX Nifty is currently trading at 22241.25, down by 303.80 points or 1.35% after trading in a range of 22217.50 and 22450.35. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.28%, HDFC Bank up by 1.16%, Shriram Finance up by 1.10%, Axis Bank up by 0.88% and Reliance Industries up by 0.03%. On the flip side, Tech Mahindra down by 5.49%, Indusind Bank down by 5.46%, Titan Company down by 4.49%, Wipro down by 4.43% and Mahindra & Mahindra down by 3.73% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 1100.67 points or 2.96% to 37,155.50, Hang Seng declined 768.65 points or 3.24% to 22,949.64, Jakarta Composite plunged 185.31 points or 2.94% to 6,300.14, KOSPI dropped 88.97 points or 3.51% to 2,532.78, Shanghai Composite weakened 62.21 points or 1.84% to 3,325.85 and Straits Times was down by 24.23 points or 0.62% to 3,896.96.