The Sensex and Nifty ended the month down as much as 1.2%, but the headline decline masked deeper unease as a sell-off in heavyweight IT stocks – the steepest monthly drop in 17 years – rocked the market amid mounting concerns over the impact of AI-led disruptions.
Foreign institutions turned net buyers during the month after a selling rampage for the past three months, cushioning the downside, while purchases by domestic institutional investors-the mainstay of stocks in recent times-fell to the lowest in 11 months.
On Friday, the NSE Nifty settled at 25,178.65, down 317.90 points, or 1.3% and the BSE Sensex ended at 81,287.19, lower by 961.42 points, or 1.2%, ending nearly where they started in February. Traders cut their positions ahead of the weekend as tensions between the US and Iran simmered with talks between the two over their long-running nuclear dispute remaining inconclusive. Among precious metals, gold was flat while silver gained 1.7%.
ETMarkets.com
Software stocks on Friday bucked the weak trend, with the Nifty IT index notching up gains of 0.2% but the late-month advances weren’t much of respite for investors, with the measure down nearly 20% – the biggest monthly fall since September 2008, peak of the global financial crisis.
Tech stocks were swamped this month by announcements from AI firm Anthropic on Claude Cowork, Claude Code and Claude Code Security, apart from a doom and gloom report by Citrini Research.With IT stocks on the edge and a positive trigger remaining elusive, analysts expect the mood to remain uneasy for now.
“The bias remains negative, as underlying weakness is making it difficult for the index to sustain higher levels,” said Vipin Kumar, AVP, equity research and PMS, Globe Capital Market.
VIX Jumps 5% | page 8
“The immediate support for Nifty is the psychological mark of 25,000 and if this level is breached, the index could slide further towards 24,600,” said Kumar of Globe Capital.
The Volatility Index (VIX)-the stock market’s fear gauge–rose 4.9% to 13.7, resuming its advance after a decline earlier this week, following the sell-off on Friday.
Elsewhere in Asia, Hong Kong rose 1%, while China and Japan gained 0.4% and 0.2%, respectively. Taiwan ended marginally higher, while South Korea fell 1%.
At home, FPIs sold shares worth a net Rs 7,536.4 crore on Friday. Their domestic counterparts bought shares worth Rs 12,292.8 crore. In February, global investors bought stocks worth Rs 12,245 crore. In the same period, domestic investors purchased Rs 38,423 crore based on provisional data.
As geopolitical tensions and uncertainty over US tariff policy linger in the background, Indian stocks continue to be weighed down by persistently lofty valuations.
“Any positive news flow failed to enthuse the Street in February due to high valuations and lower earnings growth,” said Dharan Shah, founder, Tradonomy Research Co.