Indian equities witnessed a sharp selloff on February 24, with the benchmarks tumbling amid global uncertainty, IT sector weakness and rising geopolitical tensions.
The Sensex plunged 1,069 points, or 1.28 percent, to close at 82,225.92. The Nifty 50 declined 1.12 percent to settle at 25,424.65.
Investor wealth eroded by nearly ₹3 lakh-crore in a single session, as the total market capitalisation of BSE-listed companies fell to ₹466 lakh-crore from ₹469 lakh-crore in the previous session.
Mid and small caps, though in the red, outperformed the benchmarks. The BSE 150 MidCap Index slipped 0.40 percent, while the BSE 250 SmallCap Index dropped 0.76 percent.
Global markets remain on edge after the US Supreme Court struck down tariff measures introduced by President Donald Trump. However, the setback appears to have prompted the administration to explore alternative legal routes.
Reports suggest Washington may invoke Section 232 of the Trade Expansion Act of 1962 to reimpose tariffs on national security grounds. Trump has also warned that countries aligning with the court’s ruling could face steeper import duties.
Markets are closely tracking Trump’s first State of the Union address of his second term, scheduled for February 24, for signals on trade policy. Any escalation in tariff tensions could weigh on global trade and emerging markets such as India.
Investors are also wary of rising tensions between the US and Iran. Protests in Iran and reports of a harsh government crackdown have added to uncertainty.
The next round of nuclear talks between Washington and Tehran is due on February 26. Any adverse development could impact crude oil prices and global risk sentiment.
The Nifty IT index slumped nearly 5 percent on Tuesday and has fallen around 21 percent so far in February.
The selloff has been driven by:
Fears of AI-led disruption to traditional IT services
Elevated US interest rates
Weakness in global tech stocks
US-based AI firm Anthropic recently said its Claude Code tool can help modernise legacy Cobol systems, triggering concerns over long-term demand for conventional IT services. Shares of IBM have also seen pressure amid these developments.
Weakness in ADRs of Indian IT companies indicates that the sector may remain under strain in the near term.
Brent crude climbed about 1 percent to move above $72 per barrel, hovering near a six-month high.
For India, one of the world’s largest oil importers, elevated crude prices pose multiple risks:
Higher import bill
Inflationary pressures
Potential strain on the rupee
Wider fiscal and current account deficits
Rising oil prices often dampen investor sentiment in domestic markets.
The dollar index edged up 0.20 percent and is nearing the 98 mark. A stronger dollar typically triggers capital outflows from emerging markets.
Although foreign institutional investors have returned as net buyers in recent sessions following progress in India–US trade discussions, stretched valuations and the absence of a strong earnings rebound remain concerns.
A sustained rally in the dollar could reverse the recent FII inflows into Indian equities.
Markets are currently caught between elevated valuations and global uncertainties. Trade tensions, geopolitical risks, rising crude prices and IT sector weakness are weighing on sentiment.
Unless there is clarity on global trade policy and a visible recovery in corporate earnings, volatility is likely to remain high in the near term.
