Weekly Market Recap: Sensex, Nifty Drops Over 2% Amid Trump Tariff Woes, FII Outflows

The week ended Feb 28, 2025, saw the Indian stock market in negative territory, where Nifty 50 closed all 4 sessions in red as markets were shut on Feb 26 on account of Maha Shivratri holiday. During the week, BSE Sensex and Nifty both dropped around 2.5%, with the highest drop of 1.8% at the closing on February 28, 2025.

At the end of the week, i.e., Feb 28, Nifty 50 settled at 22,124.70, down 1.86%, while Sensex dropped 1.9% to 73,198.10.

News Roundup for the Week

• A major factor behind the market downturn has been aggressive selling by foreign institutional investors (FIIs). In 2025, FIIs have already offloaded a net $12.2 billion worth of Indian equities, following $12.3 billion in net sales during the fourth quarter of 2024.
• US President Donald Trump is set to introduce tariffs on Canada and Mexico beginning Tuesday, March 4, 2025, while also doubling the 10% universal tariff on Chinese imports.
• Meanwhile, Tesla is reportedly preparing to enter the Indian market, with plans to set up a manufacturing facility and introduce its EV lineup, as per news reports.

IT and Auto Stocks Lead Decline

• The total market capitalisation of all BSE-listed companies fell by ₹8.9 lakh crore, settling at ₹384.22 lakh crore.
• The Nifty IT index plunged up to 6.5%, mirroring overnight losses on Wall Street due to a sharp decline in Nvidia’s stock. Tech Mahindra, Wipro, and Mphasis emerged as the top losers in the sector.
• Meanwhile, the Nifty Auto index ended nearly 4% lower, while other sectors, including Banking, Metal, Media, FMCG, Pharma, Realty, Consumer Durables, and Oil & Gas, recorded declines ranging from 0.7% to 3.5%.

Conclusion

The Indian stock market ended the week on a negative note, weighed down by FII outflows, global trade concerns, and sectoral declines in IT and auto stocks. The sharp drop in market capitalisation and broad-based sectoral weakness indicate a cautious sentiment among investors.

Looking ahead, key triggers for the upcoming week include Trump’s tariff decisions, upcoming GDP data, FII activity, and global market trends. Investors will also keep an eye on crude oil prices, and central bank policy cues, which could influence market direction in the near term.

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