Mumbai, February 24: India’s benchmark equity indices closed sharply lower on Tuesday, logging their steepest decline in four sessions as heavy selling in banking, infrastructure and information technology stocks weighed on sentiment. Fresh concerns over United States trade policy unsettled global markets and dampened investor confidence.
The 50 share Nifty ended at 25,424.65, down 288.35 points or 1.12 per cent. The Sensex settled at 82,225.92, falling 1,068.74 points or 1.28 per cent.
US Tariff Concerns Trigger Risk Aversion
Market sentiment remained under pressure after US President Donald Trump threatened to impose new tariffs, raising fears of renewed trade tensions.Over the weekend, Trump announced temporary global tariffs of 15 per cent and cautioned countries against backing out of recently negotiated trade agreements. The move followed a ruling by the Supreme Court of the United States, which had declared his earlier tariffs unlawful.
These developments unsettled global markets and contributed to cautious positioning by investors in Indian equities.
Nifty IT Index Sinks to Two Year Low
Information technology stocks bore the brunt of the selloff. The Nifty IT index plunged 4.74 per cent to close at 30,053.50 after hitting a two year low during intraday trade.Weak global cues and concerns over US technology spending pressured the sector, making it the worst performer among major indices.
The Nifty Realty index declined 2.54 per cent, emerging as the second biggest loser. In contrast, the Nifty Metal index outperformed the broader market, offering some support amid the broader weakness.
Broader Markets Show Relative Resilience
Despite the sharp fall in frontline indices, broader markets displayed relative stability. The Nifty MidCap index ended 0.32 per cent lower, while the Nifty SmallCap index declined 0.55 per cent.This suggests selective participation in mid and small sized stocks even as benchmark indices faced sustained selling pressure.
Key Technical Levels for Nifty
On the technical front, the 25,500 to 25,600 zone remains a critical resistance band for the Nifty. A decisive breakout above this range could trigger short covering towards 25,700.Conversely, a sustained move below 25,300 may intensify downward momentum towards 25,200 or lower, indicating the possibility of further volatility in the near term.
AI Trade Under Scrutiny
Christopher Wood, Global Head of Equity Strategy at Jefferies, said the artificial intelligence driven trade that has dominated stock markets, particularly in the United States, could come under scrutiny this year.His remarks added to concerns that elevated valuations in AI related stocks may face pressure if global growth slows or trade tensions escalate.
Outlook Remains Volatile
Analysts noted that the sharp correction in benchmark indices reflects rising global uncertainties and a defensive shift in investor positioning.Escalating macro concerns around US trade and tariff developments, coupled with worries about AI led disruption in the global technology space, weighed on overall risk appetite and prompted broad based selling across sectors.
With global cues driving sentiment, markets are expected to remain volatile in the near term as investors track further developments on trade policy and global growth.
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