Key gauges end in deep red; Nifty below 22,150 mark

Indian equity benchmarks witnessed a sharp sell-off and ended with losses of around two percent on Friday amid broad-based selling ahead of key GDP data and concerns over fresh tariff comments from US President Donald Trump and a slowing U.S. economy. 

Some of the important factors in today’s trade: 

Nervousness ahead of GDP data: Investors were closely watching GDP data for October-December quarter (Q3) of current fiscal, which is scheduled to be released on Friday. 

Relentless foreign fund outflows: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 556.56 crore in the capital markets on net basis on Thursday, according to exchange data. So far in February, FIIs have sold Indian equities worth Rs 47,349 crore.

India’s economic growth remained robust: Traders overlooked the International Monetary Fund’s (IMF) report showing that India’s economic growth remained robust, with Gross domestic product (GDP) growth of 6 percent Y-o-Y in the first half of 2024/25.

Moderation in inflation creates policy space for RBI to cut rates: The National Council of Applied Economic Research (NCAER) in its the monthly economic review has said that moderation in inflation to five-month low of 4.3 per cent in January has provided RBI more space to cut interest rate in policy meet. 

Weak global cues: European markets were trading mostly in red amid concerns about global growth outlook in the wake of fresh tariff threats by U.S. President Donald Trump. Asian markets settled down on Friday after U.S. President Donald Trump said his proposed 25 percent tariffs on Mexican and Canadian goods will take effect on March 4 along with an extra 10 percent duty on Chinese imports over the fentanyl opioid crisis, deepening the fear of a global trade war.

Finally, the BSE Sensex fell 1414.33 points or 1.90% to 73,198.10, and the CNX Nifty was down by 420.35 points or 1.86% to 22,124.70.          

The BSE Sensex touched high and low of 74,282.43 and 73,141.27 respectively. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.16%, while Small cap index was down by 2.33%.

The top losing sectoral indices on the BSE were TECK down by 4.20%, IT down by 4.13%, Telecom down by 4.09%, Auto down by 3.84% and Consumer Discretionary down by 2.74%, while there were no gaining sectoral indices on the BSE. 

The lone gainer on the Sensex was HDFC Bank up by 1.86%. On the flip side, Tech Mahindra down by 6.19%, Indusind Bank down by 5.48%, Mahindra & Mahindra down by 5.21%, Bharti Airtel down by 4.86% and Infosys down by 4.32% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that India needs to ramp up its bilateral relations for trade and investment, as the world is witnessing a churn, and bilateralism seems to be the new catalyst tool. She said these are very interesting yet challenging times and the government is making all efforts to make India move up the ladder and be an engine of global growth. She said ‘Bilateralism is now taking the top of the agenda… It is for us to ramp up our bilateral relations with many countries, not just for trade, not just for investment, but also for strategic relations. So multilateralism, sort of, out, I’m still saying with a qualifying word ‘sort of out’, but bilateralism is very much your only catalytic tool that you can use’.

Observing that multilateral institutions are increasingly fading away, she said every attempt to revive them and energize them is not having the desired result. She said ‘So, where you have to address issues which affect more than your own country. You have no more forums left which can effectively deliver… multilateral institutions and their contributions probably are fading away, at least in the near future, till an attempt is made to revive them with that kind of energy… It’s not going to happen in the next few years’.

Asserting that global trade is undergoing a complete reset, she said ‘the terms and references with which all of us played trade, with some kind of an anchor in the World Trade Organization are no longer available.’ She said there is no Most Favoured Nation (MFN) concept, and added that every country wants to be treated special, and every country wants to be sure that special treatment that they get is not by default. She said ‘So if the WTO is getting weakened or multilateral institutions are not being effective… bilateral arrangements are going to be the order of the day in terms of trade’. 

Sensing the movement toward a new world, India has initiated bilateral trade talks with many nations including the UK and is planning a bilateral trade agreement with the US. India is also in discussion with the 27-nation grouping - the European Union, for a free trade pact. Talking about reforms, Sitharaman said, it is something which the government will continue to do in various areas including debt management and maintaining fiscal prudence.

The CNX Nifty traded in a range of 22,450.35 and 22,104.85. There were 5 stocks advancing against 45 stocks declining on the index. 

The top gainers on Nifty were Shriram Finance up by 2.01%, HDFC Bank up by 1.73%, Coal India up by 1.28%, Trent up by 0.69% and Hindalco up by 0.32%. On the flip side, Indusind Bank down by 7.11%, Tech Mahindra down by 6.44%, Wipro down by 5.43%, Bharti Airtel down by 4.93% and Mahindra & Mahindra down by 4.82% were the top losers. 

European markets were trading mostly in red; France’s CAC fell 25.82 points or 0.32% to 8,076.70 and Germany’s DAX lost 78.32 points or 0.35% to 22,472.57, while UK’s FTSE 100 increased 15.26 points or 0.17% to 8,771.47.

Asian markets settled down on Friday ahead of the release of the Federal Reserve's preferred inflation gauge, the PCE price index, later in the day for additional clues on the US Fed's interest rate trajectory in 2025. Chinese and Hong Kong shares declined as concerns over a potential global trade war heightened. China vowed to take all necessary countermeasures and defend its legitimate rights and interests after US President Donald Trump said he would impose an additional 10% tariff on Chinese imports, intensifying a brewing trade war between the world's two largest economies. Japanese shares plunged amid much uncertainty over how earnings of companies operating overseas would be affected by the US tariff policies. Moreover, sharp declines in chip-related stocks following Nvidia's slump has also dampened market sentiments. Stock market of Taiwan is closed for Peace Memorial Day.