Benchmark indices on Monday tumbled to their lowest levels in eight months dragged by IT and financial stocks on concerns over slowing growth in the US even as foreign portfolio investors (FPIs) remained in an exit mode.
The 30-share Sensex crashed over 856.65 points to settle below the crucial 75000 level at 74454.41, after slumping 923.62 points or 1.22 per cent to a day’s low of 74387.44.
On the NSE, the broader Nifty fell 242.55 points or 1.06 per cent to 22553.35.
Investors have received more bad news from the US, which reported no expansion in business activity this month.
Worried about the impact of potential reciprocal tariffs by US President Donald Trump, they will now have to contend with fears the world’s largest economy is heading towards stagflation — the dreadful combination of high inflation and stagnant economic growth.
According to Chris Williamson, chief business economist, S&P Global Market Intelligence, while the US had been the fastest growing major (G4) developed economy late last year and into January according to the PMIs, February saw its expansion falter to a ``near-stalled pace’’ — a rate which was even weaker than rates seen in Japan and the UK and only marginally above that of the eurozone.
He added that the US Composite Flash PMI Output Index, which measures month-on-month changes in output across both goods and services, fell from 52.7 in January to 50.4, a 17-month low. In December 2024, this index had stood at a near-three-year high of 55.4.
“A key development evident in the February flash PMIs was a sharp slowing of business growth in the US, accompanied by rising goods prices,’’ he noted.
“The market is more concerned about the US’ likely move to reciprocate higher tariff levies on exporting nations, which could impact developing countries, including India,” Prashanth Tapse, senior VP (Research), Mehta Equities Ltd, said.
“FPIs are also showing no signs of putting brakes on their India exit strategy. They continue to weigh heavily on markets, with expensive valuations driving them to curb their equity bets here,’’ Tapse said.
In the last five trading sessions, the Sensex has lost 1542.45 points or 2 per cent, while the Nifty has plummeted 406.15 points or 1.76 per cent.
Provisional data from the NSE on Monday showed FPIs selling stocks worth ₹6,287 crore. So far in this calendar year, they have offloaded stocks of more than $12 billion.
This has been attributed to expensive valuations, tepid corporate earnings and Trump’s policies which have increased the allure of alternate assets such as the US dollar and its treasuries.
In Monday’s trade, HCL Technologies lost the most by 3.32 per cent. It was followed by Zomato, Tata Consultancy Services, Infosys, Tech Mahindra, Bharti Airtel, Tata Steel and NTPC which fell up to 3.32 per cent.
On the winning side, Mahindra & Mahindra, Kotak Mahindra Bank, Maruti, Nestle and ITC rose up to 1.56 per cent.
In the broader markets, the BSE smallcap gauge declined 1.31 per cent, and the midcap index dipped by 0.78 per cent.
Rupee flat
At the forex markets, the rupee closed flat at 86.70 against the US dollar. Though it opened stronger at 86.57, the domestic unit came under pressure due to dollar demand from oil importers.
Forex circles said that state-run banks were purchasing the greenback on behalf of oil companies. During intra-day trades, the rupee hit a high of 86.52.
