February has come to an end on a rather disappointing note. The Sensex, Nifty plunged to June 2024 lows and the Nifty closed below 22,200 for the first time since June 4, 2024. This is the first time since Covid, the Nifty clocked fifth consecutive month of loss on the trot. The Nifty ended down 2% for the week. The Sensex too closed near 9-month lows at 73,198. For the week the Benchmark 30-stock Index ended down almost 3%. Both the Sensex, Nifty are around 4% away from their 52-week lows.
The carnage was deeper across the broader markets. The BSE Midcap index slumped 2.6% and the Smallcap index dropped 3%. For the week, BSE Smallcap is down 6% while the BSE MIdcap Index is down over 5%.
“While the trend of market decline continues unabated, the larger than expected fall has been caused due to uncertainties surrounding the actual impact of the countervailing tariffs imposed by the US, and similar walls erected by other countries including China. What has caused much of consternation is the possibility of China devaluing its currency in response to the tariffs to sustain its trade competitiveness. However, the last time around currency devaluation led to investment outflows from China. The move may have consequences for other regional currencies as well like Taiwan and South Korea, though the Rupee may be much less affected,” said Dr Joseph Thomas, Head of Research, Emkay Wealth Management.
ALSO READCoforge slides 3% but Jefferies has a Buy rating- 3 reasons why
The broad-based selling meant that almost every sectoral index ended in the red and the rout was maximum in IT and Auto sectors followed by PSU Banks, media, and telecom stocks. The Nifty IT index suffered the most, declining over 4%, followed by the Nifty Auto and Nifty Media indices, each down more than 3%. Consumer Durables also took a hit, slipping 3% as market sentiment remained weak.
“The national market experienced a sharp decline amid heightened bearish sentiment largely influenced by weak global cues. The decline was largely triggered on fear of the implementation of 25% tariff on U.S. imports from Canada and Mexico, set to take effect next week, along with an additional 10% tariff on Chinese goods.
» Read More
