Stock market crash: The Nifty fell 420.35 points, or 1.86 percent, to 22,124.70, continuing its losses for the eighth day in a row. For the month, the Sensex and Nifty 50 are down 6%.
Stock market crash: On Friday, February 28, India’s domestic equity benchmarks, the Sensex and Nifty 50, experienced their worst day in about five months. The NSE benchmark recorded its longest monthly losing streak in the last 29 years (since 1996), driven by outflows of foreign capital due to concerns about US tariffs.
At 73,198.10, the 30-share BSE benchmark Sensex fell 1,414.33 points, or 1.90 percent. It fell 1,471.16 points, or 1.97 percent, to 73,141.27 during the day. Nifty plunging 420.35 points, or 1.86 percent, to 22,124.70, extending losses for the eighth consecutive day. For the month, the indices are down 6%.
Stock market crash: On Friday, February 28, India’s domestic equity benchmarks, the Sensex and Nifty 50, experienced their worst day in about five months. The NSE benchmark recorded its longest monthly losing streak in the last 29 years (since 1996), driven by outflows of foreign capital due to concerns about US tariffs.
At 73,198.10, the 30-share BSE benchmark Sensex fell 1,414.33 points, or 1.90 percent. It fell 1,471.16 points, or 1.97 percent, to 73,141.27 during the day. Nifty plunging 420.35 points, or 1.86 percent, to 22,124.70, extending losses for the eighth consecutive day. For the month, the indices are down 6%.
Stock market crash: Sensex, Nifty down 15-16% from peak
The BSE benchmark has lost 12,780.15 points, or 14.86 percent, from its record high of 85,978.25 on September 27 of last year. From its all-time high of 26,277.35 on September 27, 2024, the Nifty has plummeted 4,152.65 points, or 15.80%. Due to the collapse of Indian stocks and the depreciation of the rupee, investors’ wealth fell by ₹9 lakh crore on Friday.
A bear market was confirmed by the more locally focused and larger mid-cap index, which dropped more than 20% from its record finish on September 24 due to pressure from low earnings, high valuations, impending US tariffs, and ongoing overseas outflows. The pattern has previously been validated by the small-cap index.
February saw the worst monthly performance for the mid-cap and small-cap indexes since the COVID-19 pandemic-induced selling in March 2020, with declines of 11% and 13%, respectively. In addition, the Indian rupee lost 19 paise against the US dollar on Friday, closing at 87.37.
The market capitalization of companies listed on the BSE fell by ₹9,08,798.67 crore to ₹3,84,01,411.86 crore ($4.39 trillion) on Friday as a result of the steep drop in stocks. From the record high of ₹4,77,93,022.68 crore in September of last year, their market capitalization has decreased by ₹93.91 lakh crore.
Throughout the month, all 13 major sub-indices experienced declines, with the largest losses being in information technology and real estate equities. Friday’s 4.2% decline in the IT index led to losses on the benchmark index as concerns about a possible downturn in the largest economy in the world were heightened by poor US labor market statistics.
What should be your trading strategy?
Ajit Mishra, SVP, Research, Religare Broking Ltd., claims that the new expiry series got off to a rough start. Weak global cues caused the markets to drop by about 2%. As the day went on, the bearish attitude that had been present from the beginning grew stronger, leading the Nifty to close close to the day’s low.
Mishra asserts that the market is currently struggling with worries about possible trade wars and that uncertainty frequently weighs more than the actual event. Pressure is still increased by foreign investors’ persistent selling.
Because of the current weakness, traders should maintain a cautious approach with a negative bias until clear signs of a pause or reversal occur. Prioritizing hedged bets and using prudence when handling leverage are also smart strategies for risk management, according to Mishra.
According to D-Street experts, the markets are altering company valuations, particularly the high PE ones, as long-term growth prospects are being assessed realistically rather than excitedly.
The selling pressure was exacerbated by banks’ low earnings projections brought on by an increase in bad loan provisions and margin pressure. Outflows from passive funds have resulted from volatility generated by the reshuffling of the MSCI index, according to Dr. Narayani Ramachandran, Director and Professor of Finance at NMIMS Bengaluru.
Foreign investors move their money to China, where opportunities are presented by valuations and regulatory policies, as a result of high US bond yields making stocks less appealing. “Volatility may continue, and investors should keep a close eye on trends while taking defensive industries like IT, FMCG, and pharmaceuticals into consideration,” Dr. Ramachandran continued.
“Improving Q3 earnings show underlying resiliency despite these challenges. Investor confidence should rise as international trade tensions subside and the RBI’s policy changes take effect, which might result in fresh inflows and a market rebound, according to Mayank Mundhra, FRM-VP Risk & Head Research Abans Group.
Technical View
On the downside, the Nifty 50 is technically at the crucial threshold of 22,000. The RSI has dropped below 30, signaling oversold conditions that could result in a comeback in the upcoming sessions. The Bank Nifty saw significant losses as well, with the next support level at 48,200.
“We are on the verge of a market surrender given today’s losses. Given the current oversold levels, a relief rally could occur the following week. However, the market as a whole is anticipated to be volatile, with a short-term bearish tilt, according to Lemonn Markets Desk’s Satish Chandra Aluri.
