Market Mayhem: The Indian stock market experienced a sharp decline on Friday, February 14, as Sensex and Nifty erased their early gains and ended in the red. This marks the eighth consecutive session of losses, despite crucial discussions between Prime Minister Narendra Modi and former U.S. President Donald Trump.
At midday trading, the Sensex plunged 550.11 points (0.72%) to 75,588.86, while the Nifty dropped 188.1 points (0.81%) to 22,843.30. All sectoral indices were trading in the red, indicating widespread weakness across the market.
Market analysts attribute today’s decline to three major factors:
1. Trump’s Reciprocal Tariff Policy Dampens Sentiment
Former U.S. President Donald Trump reaffirmed his “Reciprocal Tariff” policy, stating that the U.S. would impose equivalent tariffs on imports from countries, including India.
Trump remarked,
“If India taxes our goods, we will impose the same tariff on their products.”
This announcement created a negative sentiment across global markets, including India, as it raised concerns over trade uncertainties.
However, in a significant development, India and the U.S. agreed to expand bilateral trade to $500 billion by 2030. While details of the agreement remain undisclosed, market experts believe that uncertainties regarding tariff structures could impact investor confidence.
2. Heavy Selling by Foreign Institutional Investors (FIIs)
Foreign Institutional Investors (FIIs) have been aggressively selling Indian equities.
- In February alone, FIIs have pulled out ₹19,077 crore from Indian markets.
- In January 2025, FIIs withdrew ₹78,027 crore, indicating sustained selling pressure.
- On Thursday, February 13, FIIs sold shares worth ₹2,789.91 crore, further dragging market sentiment.
Weakness in the Indian rupee and global economic uncertainties have contributed to this continuous outflow. Market analysts suggest that unless FII sentiment reverses, Indian equities may continue to face headwinds.
3. Weak Q3 Earnings Weigh on Investor Sentiment
Disappointing Q3 earnings results have further dented market confidence.
- Natco Pharma, Senco Gold, and Deepak Nitrite witnessed heavy selling after posting weaker-than-expected financial results.
- FMCG companies are also under pressure due to declining volume growth, reflecting sluggish consumer demand.
This lackluster earnings season has led to profit booking across multiple sectors, adding to the market’s downward momentum.
What Do Technical Analysts Say?
According to Anand James, Chief Investment Strategist at Geojit Financial Services, the Nifty is facing resistance at 23,220.
- If Nifty surpasses 23,220, the next upside target is 23,430.
- However, if Nifty fails to stay above 23,220 or slips below 23,000, downward pressure could intensify.
- A break below 22,800 would require a fresh assessment of the market trend.
Conclusion
The Indian stock market remains volatile due to global trade uncertainties, sustained FII selling, and weak corporate earnings. Traders and investors should closely monitor upcoming developments, especially U.S.-India trade policies, FII activity, and corporate earnings reports.
Technical indicators suggest that Nifty must hold key support levels to avoid further downside risks. Market participants should stay cautious and track global cues for further direction.
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