Stock market crash: Nifty logs longest monthly losing streak in 29 years; What should be your trading strategy? | Stock Market News

Stock market crash: India’s domestic equity benchmarks, Sensex and Nifty 50, logged their worst day in around five months on Friday, February 28, with the NSE benchmark posting its longest monthly losing streak in the last 29 years (since 1996), dragged by foreign capital outflows amid US tariff fears. 

The 30-share BSE benchmark Sensex tanked 1,414.33 points or 1.90 per cent to settle at 73,198.10. During the day, it crashed 1,471.16 points or 1.97 per cent to 73,141.27. Extending losses to the eighth straight day, Nifty dropped 420.35 points or 1.86 per cent to 22,124.70. The indices are down six per cent for the month.

Stock market crash: Sensex, Nifty down 15-16% from peak

The BSE benchmark, which hit a record peak of 85,978.25 on September 27 last year, has given up 12,780.15 points, or 14.86 per cent from the peak. The Nifty has crashed 4,152.65 points, or 15.80 per cent, from its lifetime high of 26,277.35 on September 27, 2024. Investors’ wealth tumbled by ₹9 lakh crore on Friday, with the sharp decline in the domestic equity market.

The broader and more domestically focussed mid-cap index confirmed a bear market, falling more than 20 per cent from its September 24 record close, pressured by poor earnings, lofty valuations, looming US tariff concerns and persistent foreign outflows. The small-cap index had confirmed the trend earlier.

Following the sharp decline in equities, the market capitalisation of BSE-listed firms eroded by ₹9,08,798.67 crore to ₹3,84,01,411.86 crore ($ 4.39 trillion). Their market cap has eroded by ₹93.91 lakh crore from last year September’s record high of ₹4,77,93,022.68 crore.

The mid-cap and small-cap indexes fell 11% and 13%, respectively, in February, their worst monthly performance since the COVID-19 pandemic-induced selling in March 2020. All 13 major sub-indexes fell for the month, with realty and information technology stocks leading the losses.

On the day, the IT index slumped 4.2%, leading losses on the benchmark index, after weak U.S. labour market data added to worries of a potential slowdown in the world’s largest economy may be slowing.

What should be your trading strategy?

Ajit Mishra – SVP, Research, Religare Broking Ltd said, “The new expiry series began on a weak note, with markets slipping nearly two percent, weighed down by weak global cues. The bearish sentiment was evident from the start and intensified as the session progressed, pushing Nifty to close near the day’s low at 22,120. The decline was broad-based, with IT, auto, and FMCG leading the losses, while the broader indices also followed a similar trend.

Uncertainty often weighs more than the actual event, and the market is currently grappling with concerns over potential trade wars. Additionally, persistent FII selling continues to add pressure. On a technical front, after five consecutive months of decline, Nifty has approached the crucial support zone of 21,800-22,000, where multiple key indicators align.

Given the prevailing weakness, traders should maintain a cautious stance with a negative bias until clear signs of a pause or reversal emerge. It is also advisable to manage leverage carefully and prioritize hedged trades for risk management.”