Sensex, Nifty Down Over 1.25%; US Tariff Woes Irks the Street

Equity markets continued their declining spree on February 28 amid U.S. President Donald Trump’s tariff threats and ahead of the release of India’s GDP numbers for the October-December 2024 quarter and FY2024-25.

BSE Sensex fell by 952.39 points, or 1.28% at 73,660.04 in the early morning trade. Nifty fell by 1.25% or 282.45 points, to 22,265.05.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “Stock markets dislike uncertainty, and uncertainty has been on the rise ever since Trump was elected the US president. The spate of tariff announcements by Trump has been impacting markets and the latest announcement of additional 10 per cent tariff on China is a confirmation of the market view that Trump will use the initial months of his presidency to threaten countries with tariffs and then negotiate for a settlement favourable to the US.”

It needs to be seen how China will respond to the latest round of tariffs. As of now markets have not factored in a full blown trade war between the US and China.

He said, “However, the uncertainty element has increased as reflected in the sharp spike in CBOE volatility index to 21.13.”

Among major external factors, inflation has remained a major concern in Japan. As per the latest data, core consumer prices soared by 2.2% in February against the year-ago period. Though core inflation cooled for the first time in four months, it remained above the Bank of Japan’s (BoJ) 2% tolerance limit. BoJ is expected to hike interest rates, which could in turn impact Yen carry trade segment.

BSE Smallcap index tumbled 1.93%, while BSE Midcap index dropped by 1.94%.

So far, in this calendar year, FPIs have dumped Indian equities worth ₹1.137 lakh crore.