Indian equity markets witnessed a sharp erosion of investor wealth on Friday, February 28, as an intense wave of selling dragged benchmark indices significantly lower. The BSE Sensex plunged nearly 1,000 points during the session, reflecting broad-based weakness across sectors. The sell-off translated into a massive destruction of market value, with more than Rs 5 lakh crore wiped off the total market capitalisation of BSE-listed companies in a single day.
By the close, overall market capitalisation had slipped to around Rs 463 lakh crore, underscoring the scale of the downturn and the depth of risk aversion gripping Dalal Street.
The NSE Nifty 50 slipped nearly 220 points to settle below the 24,800 mark. The decline capped a volatile week and marked one of the sharper single-session falls of the month, as participants chose to reduce risk exposure ahead of the weekend.
The session began on a tentative note following mixed global cues, but selling intensified through the day as heavyweight stocks across banking, financial services and consumer sectors came under pressure. Market breadth remained decisively negative, with a large majority of stocks on the exchanges ending in the red, reflecting broad-based weakness rather than isolated profit-taking. Midcap and smallcap indices also retreated, though the losses there were relatively contained compared to frontline benchmarks.
Banking stocks led the decline, with private sector lenders facing persistent selling amid concerns over margins and valuation comfort. Financial services counters followed suit, dragging the indices lower as institutional investors trimmed positions. Auto and metal shares were also subdued, mirroring worries about demand sustainability and global commodity price trends. Information technology stocks showed mixed performance, as investors weighed the impact of global growth signals and currency movements.
Analysts attributed the weakness partly to continued foreign institutional investor outflows, which have weighed on sentiment through the month. Elevated global bond yields and uncertainty around the trajectory of interest rates in major economies have kept overseas investors cautious toward emerging markets. At the same time, domestic institutional flows provided only limited cushioning against the sell-off, indicating a broader risk-off approach across market participants.
The February close also came against the backdrop of recently released GDP data, which showed stronger-than-expected economic growth in the December quarter. While the robust growth print underscores the resilience of the domestic economy, markets appeared more focused on near-term valuation concerns and global risks rather than macroeconomic strength. The divergence between healthy economic indicators and weak equity performance highlights the influence of liquidity flows and technical factors on short-term market direction.
From a technical perspective, the Nifty’s break below key support levels triggered additional selling, with traders unwinding leveraged positions. The Sensex, too, slipped below important near-term thresholds, reinforcing the cautious tone. Analysts suggest that unless the indices reclaim these levels in the coming sessions, volatility could persist in the short term.
Overall, Friday’s decline reflects a market grappling with external uncertainties and positioning adjustments at the end of a challenging month. While the domestic growth outlook remains relatively stable, equity valuations and global developments will continue to shape sentiment. Investors are likely to remain selective and defensive in the near term, watching for clearer signals from global markets and institutional flows before committing fresh capital.