Global Tariff Tensions and Weak Global Cues Trigger Heavy Selling
Mumbai: Indian stock markets faced a sharp sell-off on February 28, with the Sensex plunging over 1,000 points and the Nifty hitting a nine-month low, as fears of a full-fledged global trade war escalated. At 10:03 AM, the Sensex was down 1,009.64 points (1.35%) at 73,602.79, while the Nifty slipped 316.25 points (1.4%) to 22,228.80. The heavy selling wiped out a staggering ₹6.1 lakh crore from the market capitalization of BSE-listed firms.
What Triggered the Market Crash?
Trade War Fears Intensify
The biggest factor driving the market sell-off was US President Donald Trump’s latest tariff escalation. On February 27, Trump advanced the implementation of 25% tariffs on imports from Canada and Mexico to March 4, instead of April 2, as previously announced. Additionally, he imposed an extra 10% duty on Chinese imports, further escalating tensions between the world’s two largest economies. With markets already on edge, this announcement heightened fears of a prolonged US-China trade conflict, adding uncertainty to global trade dynamics.
Weak Global Cues and Asian Market Sell-Off
Trade war fears sent Asian markets tumbling, reflecting global investor concerns. Hong Kong’s Hang Seng Index dropped 2.3%, China’s CSI300 fell 0.8%, and Japan’s Nikkei hit a five-month low, driven by foreign outflows, inflationary pressures, and Trump’s unpredictable trade policies. Japanese stocks witnessed the largest weekly foreign outflow in nearly five months, totalling ¥1.04 trillion ($6.95 billion).
Tech Stock Sell-Off and Nvidia Impact
Nvidia’s 8.5% overnight decline after a weaker-than-expected gross margin forecast triggered a broader sell-off in tech stocks, dragging markets lower. Hong Kong-listed tech majors slid nearly 4%, erasing part of their impressive 30% gains this year.
What’s Next for Investors?
While the volatility has spooked markets, analysts believe this correction presents a buying opportunity for long-term investors. Large-cap valuations remain fair, and sectors like defence could offer resilience. However, with uncertainty looming over US-China relations, markets may remain choppy in the near term.
