Indian stock markets faced a turbulent day as the Nifty 50 fell 0.51% to 22,012.45, down from an opening of 22,194.55, amid a cocktail of global and domestic pressures. Escalating trade war fears, triggered by impending U.S. tariffs on Canada, Mexico, and China, coupled with persistent selling by Foreign Institutional Investors (FIIs) worth Rs 11,639.02 crore on Friday, set a bearish tone. Adding to the woes, disappointing domestic data including a Q3 FY25 GDP growth of 6.2% below the expected 6.3% and a 14-month low manufacturing PMI of 56.3 further eroded investor confidence, with mid- and small-cap indices like the Nifty Midcap 100 and Smallcap 100 plunging 2.15% and 2.64%, respectively.
Possible Reasons For Market Fall :
Persistent FII Selling : Foreign Institutional Investors (FIIs) dumped equities worth Rs 11,639.02 crore on Friday, with February outflows reaching Rs 34,574 crore and a 2025 total of Rs 1.12 lakh crore. This is mirrored in the Nifty Smallcap 100’s 2.64% drop to 14,312.35 (opened at 14,740.90, high of 14,825.30, low of 14,308.15).
Corporate Earnings Fears Drag Nifty 50 to 22,012.45, Down 0.51% from Day’s High : Concerns over a potential slowdown in corporate earnings growth are adding to bearish sentiment. With no major positive earnings surprises reported recently and high valuations persisting, investors are reevaluating positions, contributing to the Nifty 50’s decline to 22,012.45 (down 0.51%, opened at 22,194.55, high of 22,261.55, low of 22,004.70).
No Ukraine Peace Deal Keeps Markets Shaky : The lack of a breakthrough in Ukraine peace talks is keeping markets jittery. U.S. tariff uncertainty and geopolitical risks, without strong domestic triggers, are raising fears of higher crude oil prices, impacting emerging markets. This aligns with the Nifty Midcap 100 falling 2.15% to 46,883.10 (opened at 47,962.20, high of 48,104.35, low of 46,873.70).
GDP Growth Below Expectations : Q3 FY25 GDP grew at 6.2%, up from 5.4% in Q2 FY25 but below the forecast . This shortfall, despite capex and rural spending, is dampening investor confidence, reflected in the Nifty 50’s 0.51% slide to 22,012.45.
Rising Oil Price Concerns :Â Geopolitical tensions, including the unresolved Ukraine situation and Middle East uncertainties, are stoking fears of Brent crude prices climbing further (currently around $70-75/barrel). As India imports over 80% of its oil, this threatens higher inflation and import costs, pressuring the Nifty Smallcap 100 (down 2.64%) and Midcap 100 (down 2.15%).
Global Trade War Fears : Escalating trade tensions are rattling markets, with U.S. 25% tariffs on Canada and Mexico set for March 4, 2025, and an extra 10% duty on China, totaling 20%. Reuters, citing China’s Global Times, notes Beijing’s countermeasures against these U.S. tariffs starting Tuesday, adding to global volatility. This is evident in the Nifty 50 dropping from a high of 22,261.55 to 22,012.45.
Weak Domestic Economic Indicators : India’s manufacturing PMI slipped to a 14-month low of 56.3 in February from 57.7 in January, indicating slower factory activity with softening new orders and production. This cooling demand is weighing on sentiment, contributing to the Nifty Midcap 100’s 2.15% fall to 46,883.10 and Smallcap 100’s 2.64% decline to 14,312.35.
These points capture the multifaceted pressures on the Indian market today, with the Nifty 50 at 22,012.45 (down 0.51%), Nifty Midcap 100 at 46,883.10 (down 2.15%), and Nifty Smallcap 100 at 14,312.35 (down 2.64%), showing a deeper selloff in mid- and small-cap segments compared to large-caps .
Disclaimer: The views expressed in this article are those of the author and are based on available data and market observations. This is not intended as investment advice. Investors should conduct their own research or consult a financial advisor before making any investment decisions.