Sensex, Nifty Crash: The Indian stock market witnessed intense selling pressure on Tuesday, February 11, after Donald Trump announced a 25% tariff on steel and aluminium. Hopes of easing Trump's tariff have also taken rounds ahead of PM Narendra Modi's US trip. Investors fear that if steel companies increase their process due to Trump's tariff, it could lead to inflationary pressure. Meanwhile, gold and the dollar continue their gaining momentum. Large caps were less impacted compared to free falls in mid-cap and small-cap stocks.
Sensex, Nifty:
Sensex ended at 76,199.76, down by 1112.04 points or 1.44%, while Nifty 50 closed at 23,071.80 lower by 309.80 points or 1.32%. Bank Nifty shed 578 points. India's volatility index surged 3%. Nifty Midcap and Smallcap stocks nosedived by 4% each.
Stocks like Zomato, Tata Steel, Bajaj Finserv, Power Grid, L&T, Tata Motors, Kotak Bank, ITC, HUL, Sun Pharma, TCS, M&M, Tech Mahindra, Reliance and NTPC were top losers, with downside ranging from 1.5% to 5.5%. On the other hand, Bharti Airtel is the only stock that was in green but with a marginal upside.
Explaining why the Indian stock market plunged on February 11th, Prashanth Tapse, Senior VP (Research), Mehta Equities said, Indian markets underperformed global indices as benchmark indices plunged over 1% each on wide-spread selling, mainly ignited by worries over escalating tariff war after Trump imposed 25% import tariffs on steel and aluminium, which would hurt India's business prospects.
Tapse added that the mood is already sombre because of likely prospects of subdued government spending going ahead and dismal earnings shown so far which has created uncertainty amongst the investors and prompted them to offload their equity holdings.
Will the Indian stock market rise or fall on Wednesday, February 12?
As per Karthick Jonagadla, smallcase manager and Founder & CEO of Quantace Research, NIFTY is trading at 23,071, below the 23,250 resistance. It has to cross these levels in the short term to halt further sell-offs. The market is under pressure as FIIs have pulled out Rs 1,00,000 crore since January 2025, attracted by US bond yields at 4.49% and a strong dollar-exacerbated by the rupee at 87/$. Meanwhile, Trump's 25% tariff on steel and aluminium could cut US steel imports by 80%, increasing global surplus risks for India.
He added, "Volatility is likely until clarity emerges on Fed policy, India-US trade talks, and a domestic valuation reset. In this scenario, large caps and gold remain safer bets, so avoid knee-jerk reactions and keep a long-term view."
On the technical front, Hardik Matalia, Derivative Analyst at Choice Broking said, "On the daily chart, the Nifty index has formed a strong bearish candle for the fifth consecutive session, indicating its struggle to sustain higher levels. This pattern suggests a cautious outlook, requiring confirmation for a sustainable upside move. The market remains highly volatile. On the downside, 23,000 serves as a key support level, and a break below this mark could trigger further selling toward 22,800. On the upside, immediate resistance is seen at 23,200, with a critical hurdle near 23,300. For a continued uptrend, the Nifty must sustain above the 23,500 mark. Given the heightened volatility, traders are advised to maintain strict stop-loss measures and avoid overnight positions to protect capital."
Also, Rupak De, Senior Technical Analyst at LKP Securities said, that Nifty continues to decline as it remains below the critical 21EMA moving average. The trend remains weak; however, after a meaningful correction, the proximity to the falling wedge support could provide a reason for recovery. On the lower end, the 22,900-22,940 zone may act as strong support, while on the higher end, resistance is placed at 23,300.
To investors, Ajit Mishra - SVP, of Research, Religare Broking said, Nifty's drop below 23,200 has derailed the recovery prospects, with a potential retest of 22,800 ahead. However, the bigger concern is managing positions in midcap and smallcap stocks, which are witnessing heavy selling and appear more vulnerable. Traders should adopt a cautious stance, prioritizing risk management in the current market environment.
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