Stock markets opened on a weak note on Tuesday, mirroring the sharp decline seen in US markets overnight. The Sensex plunged nearly 400 points in early trade, while the Nifty tumbled over 100 points as nervous investors reacted to increasing fears of a possible recession in the United States. The negative sentiment was exacerbated by a heavy sell-off in Indian IT stocks, which dragged the broader market lower. Growing global uncertainties, particularly concerns over a slowing US economy and persistent trade tensions, added to the selling pressure in domestic markets, leading to a volatile trading session.
On Monday, March 10, US stock markets suffered their worst single-day fall since 2022, with major indices witnessing a sharp decline. The S&P 500 and the tech-heavy Nasdaq plunged by up to 4%, while the Dow Jones Industrial Average fell 2.08%. The dramatic sell-off came after former US President Donald Trump made ambiguous remarks about the US economy, avoiding any definitive comment on whether it could slip into a recession. His silence on the matter further rattled market sentiment, leading to massive profit-booking on Wall Street.
The ripple effect of the US market crash was immediately felt across global equities, including in India. Gift Nifty futures plummeted by 160 points in early trade, signaling a weak start for the Indian stock market. The uncertainty surrounding US economic policies and the potential impact of escalating trade disputes with China, Canada, and Mexico have fueled fears of a prolonged economic downturn. Market experts are increasingly worried that the economic uncertainty, initially expected to impact only business investments and corporate spending, might now lead to a full-fledged recession.
Kranthi Bathini, Director and Equity Strategist at WealthMills Securities Pvt Ltd, emphasized that global factors are playing a dominant role in the ongoing market correction. "The sell-off in the US markets has had a direct impact on Indian stocks, particularly as foreign institutional investors (FIIs) continue to offload their holdings," he said. He added that the market will likely remain stock-specific in the near term, but as long as the Nifty remains below 23,000, the broader sentiment is expected to stay bearish. Despite this, he advised long-term investors to hold onto fundamentally strong stocks and consider accumulating more at current levels, as quality stocks could offer attractive investment opportunities amid the market dip.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, also weighed in on the situation, pointing out that Trump’s tariff policies have created uncertainty that is now visibly impacting the stock markets. "The S&P 500 and Nasdaq have taken a beating, and fears of an impending US recession are gaining ground. However, one encouraging sign is that India’s market is still performing relatively better than the US," he noted. Over the past month, the S&P 500 has shed 7.5% of its value, whereas the Nifty has declined by only 2.7%. Vijayakumar also pointed out that the recent decline in the dollar index could be beneficial for emerging markets like India, as it may slow the pace of capital outflows. He urged investors not to panic and instead focus on accumulating high-quality large-cap stocks and select mid- and small-cap stocks for the long term.
One of the biggest drags on the Indian market was the sharp decline in IT stocks, which saw heavy selling pressure throughout the session. The Nifty IT index fell 1.47%, shedding 553.25 points, as investors exited major tech stocks amid fears of a slowdown in global IT spending. Infosys emerged as the biggest loser, plunging 3.09% and contributing 52.65 points to the Nifty’s decline. Other IT stocks also faced steep losses—Wipro dropped 2.21%, Mphasis fell 1.88%, Coforge declined 1.79%, and L&T Technology Services slipped 1.69%. LTIMindtree was down 1.52%, while Tech Mahindra lost 1.41%. Even Tata Consultancy Services (TCS), which is generally seen as a more stable IT giant, ended the session lower, albeit with a marginal decline of 0.10%.
The pressure on IT stocks stemmed from concerns that the global economic slowdown could lead to reduced spending by major clients, particularly in the US and European markets. Analysts noted that several US-based IT firms have already lowered their revenue guidance for the upcoming quarters, signaling potential weakness in the industry. If recession fears continue to grow, Indian IT companies may face further earnings pressure, which could weigh on their stock performance in the near term.
Beyond IT stocks, selling was also witnessed across other key sectors, including banking, metals, and FMCG. Heavyweight stocks such as HDFC Bank, Reliance Industries, and Tata Steel saw moderate losses, contributing to the overall market weakness. However, some defensive sectors, including pharmaceuticals and consumer goods, saw selective buying, providing minor relief to the broader indices.
Going forward, market experts believe that volatility is likely to persist, with investors keeping a close eye on global developments, particularly any updates related to US economic policies and trade negotiations. Additionally, the upcoming US Federal Reserve meeting will be a crucial event for global markets, as any hint of monetary tightening could trigger further selling.
Despite the near-term challenges, some analysts remain optimistic about India’s long-term growth prospects. They argue that India’s strong domestic economy, resilient corporate earnings, and steady retail participation could help cushion the impact of global uncertainties. Investors are advised to adopt a cautious approach, focusing on high-quality stocks and avoiding speculative trades in the current market environment.
Overall, while Sensex and Nifty are facing pressure from global headwinds, analysts believe that patient investors can find value in the market’s correction phase. The coming weeks will be critical in determining whether the recent sell-off is a temporary setback or the beginning of a deeper correction.
