Indian Stock Market Faces Eighth Day of Decline Amid Foreign Fund Outflows and Global Trade War Fears; BSE Market Cap Drops by USD 4.61 Trillion

Mumbai, February 14 - The Indian stock market experienced its eighth consecutive day of decline on Friday, with the BSE Sensex dropping 199.76 points, or 0.26%, to close at 75,939.21 (Source: PTI). This sustained downturn has led to a significant erosion of investor wealth, with the market capitalization of BSE-listed firms plummeting by Rs 25,31,579.11 crore (USD 4.61 trillion) over the eight-day period. Analysts attribute the negative sentiment to persistent foreign fund outflows and renewed concerns over a potential global trade war, exacerbated by US President Donald Trump's threat to impose reciprocal tariffs on India. According to Mehta Equities Ltd, lingering foreign fund outflows are perturbing investors. Master Capital Services highlighted that investor sentiment took a hit after Trump reiterated his stance on imposing reciprocal tariffs on trade partners, which includes India too, reigniting fears of a potential trade war. Uncertainty surrounding tariff structures could weigh on investor confidence. Weak corporate earnings for the December quarter further dampened market sentiment with several sectors showing weaker-than-anticipated recovery. Further, the high valuations on which the Indian equity market was trading were not able to justify the growth. Foreign institutional investors (FIIs) are continuously selling their stakes in the Indian equity market. Sectoral indices reflected widespread losses, with services, industrials, and capital goods sectors experiencing the most significant declines. Adani Ports led the losses among Sensex stocks, dropping over 4%. Geojit Financial Services noted that risk-averse sentiment continues to rule investors' minds as corporate earnings are significantly lower than the market expectations during the start of the year, especially for mid and small caps. Muted earnings trend, INR depreciation along with external factors like tariffs are expected to keep the sentiments weak in the near term, which could further push FIIs outflows. The BSE smallcap gauge tanked 3.24 per cent and midcap index dropped 2.59 per cent. As many as 3,320 stocks declined while 681 advanced and 82 remained unchanged on the BSE. Global markets also showed mixed trends, with Asian markets closing lower and European markets displaying mixed performance. The situation is expected to lead to continued caution among investors and potential for further FII outflows in the near term.