The major benchmark indices of the Indian stock market, Nifty 50 and Sensex, suffered a huge decline on the last trading session of the week i.e. Friday (28 February). According to the Bombay Stock Exchange (BSE), the Sensex fell by a huge 1409.59 points to 73,195.57 points. Nifty saw a decline of 490.80. It has reached a low of 4,671.70.
By 1 pm, 81 BSE-listed stocks hit the upper circuit, while 460 stocks were locked in the lower circuit. During the same period, 46 stocks touched a 52-week high, while 817 stocks hit a 52-week low.
These 10 stocks saw a decline in the Indian stock market
- Chambal Fertilizer shares fell by about 7 percent,
- Redington shares by 6.8%,
- Credit Access by 6%,
- Patanjali Food by 10%,
- IREDA shares by 7%,
- Hexacom by about 5 percent,
- Infoedge by about 6 percent,
- Tech Mahindra by 5 percent,
- Indusind Bank shares by 4.50 percent
- and Mahindra & Mahindra shares were trading down by about 5 percent.
4 Key Reasons Behind the Indian stock Market Crash
Global Trade Tensions and Tariffs: US President Donald Trump announced on Thursday that his proposed tariffs on Mexico and Canada will come into effect from March 4. In addition, China will face an additional 10 percent tariff from the same date. The 25 percent tariff on imports from Mexico and Canada was postponed for a month. Earlier this deadline was ending on February 3. However, there was uncertainty about whether these tariffs would be reimposed or not.
Weakness in Asian Markets: After US President Donald Trump confirmed that tariffs on imports from Mexico and Canada will come into effect from next week. Asian markets were trading with a decline on Friday. Japan’s Nikkei was down 2.81 percent, while the Topix slipped 1.87 percent. ASX 200 and Kospi were down 1.03 and 2.74 percent respectively. CSI 300 was also trading down 0.6 percent.
Impact of AI Sector Volatility: The weaker than expected quarterly results of Nvidia, the largest company in the AI chip industry, also played an important role in causing a stir in the global markets on Friday. The Nikkei stock average reached its five-month low of 37084.44 on Friday. Nvidia shares fell by 8.5 percent overnight. The company performed weaker than expected, especially on the gross margin front. Although Nvidia has expressed strong estimates about its future growth, it failed to lift the morale of investors.
GDP data: Actually, GDP data for the December quarter is going to be released this evening. Investors feel that India’s economy can pick up pace again this quarter. But slow economic growth, weak earnings momentum and selling by foreign investors have affected the market. The market has fallen 14 percent from its record high in late September.
Is the risk of recession increasing?
Globally, the stock market fears that if US tariffs and DOGE dominate, the risk of recession in the US may increase. This can also increase global risk. US tariffs can lead to a bigger decline or a trade war. Nuwama Institutional Equities warned that if there is further job loss, DOGE can also put Trump in political trouble.
On the other hand, the Asset Monetisation Plan is still in its initial stages. Domestic brokerages said that if these policies are taken forward, it can give good results. If the Trump government imposes high tariffs, it will pose a risk of retaliation and a possible global trade war.
Nuwama said this could strengthen the dollar and increase US bond yields, which will not only put double pressure on the already weak global economy but will also weaken the sentiment of American consumers.
This move by Elon Musk will also increase the risk of recession
Nuwama believes that if Elon Musk succeeds in achieving less than half of his $2 trillion target for spending cuts, the risk of recession may increase. After all, the government sector has played an important role in strengthening the US economy recently. Nuwama said that in 2023 and 2024, the US government has recorded a growth of 25 percent in new jobs.
