Feb freak show for markets

The benchmark indices lost nearly 2% on Friday as US President Donald Trump’s tariff threats saw foreign portfolio investors (FPIs) selling as much as `11,639 crore – one of the biggest sell-offs – in their rush to exit India. Indian investors have lost `40 lakh crore in February – the worst ever monthly loss — after Friday’s sell-off. 

The Sensex fell 1,414.33 points, or 1.90%, to close at 73,198.10 points, while the Nifty declined 420.35 points, or 1.86%, to 22,124.70. Both the indices posted their worst weekly loss of around 3% in 2025. Additionally, the nearly 6% decline in February marked the steepest monthly fall in four months. The Nifty’s five-month losing streak is the longest since 1996.

Calling the current market correction “rough”, Deepak Shenoy, founder and CEO of Capitalmind, said the downturn may not be over yet. He advised investors to focus on quality companies and brace for heightened volatility, as the correction could persist longer.

“Domestic investors went into panic mode and offloaded equities at will, as weak global market cues triggered a major selloff, causing benchmark indices to crash nearly 2%,” said Prashanth Tapse, senior V-P (research), Mehta Equities. He also noted growing investor discomfort over Trump’s announcement of import levies on several nations.

The broader BSE Midcap and BSE Smallcap indices also fell sharply on Friday, declining 2.16% and 2.33%, respectively, underperforming the benchmarks. In February, both indices tumbled 10.45% and 13.76%, respectively.

The Sensex and Nifty are now down 14.72% and 15.61% from their respective peaks recorded in late September, while the BSE Midcap and BSE Smallcap indices are trading 22.23% and 25.34% below their all-time highs.

As a result of broad-based selling, investor wealth eroded by a record `40 lakh crore in February, including `9.08 lakh crore on Friday alone.

Foreign portfolio investors (FPIs) net sold shares worth $1.3 billion (`11,639 crore) on Friday, marking the third-highest single-day outflow. In February, they net sold equities worth $5.3 billion (`46,212 crore) and have offloaded $25.3 billion (`2.18 lakh crore) since October 2024.

In contrast, domestic institutional investors (DIIs) purchased shares worth `12,308.63 crore on Friday, making it their third-highest single-day buying. Over the past five months, they have invested `3.37 lakh crore, including `64,853 crore in February alone.

Among major global equity markets,

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