Dalal Street witnessed a massive selloff on February 28, with the Sensex plunging nearly 1,400 points and the Nifty slipping below 22,150, triggering widespread panic among investors. Within the first 45 minutes of trading, nearly ₹6 lakh crore in market capitalization was wiped out on the Bombay Stock Exchange (BSE). All major sectors, including IT, auto, media, and telecom, saw declines of 2-3%, while the BSE Midcap and Smallcap indices also dropped 2%, further dampening sentiment.

Among the biggest losers on the Nifty were IndusInd Bank, M&M, Wipro, Tech Mahindra, and Infosys, while Coal India, Shriram Finance, Reliance Industries, and Grasim managed to post gains. Despite a few bright spots, the overall market mood remained highly bearish.

The sharp downturn was largely driven by global uncertainty, particularly regarding U.S. President Donald Trump’s mixed messaging on tariffs. Trump’s announcement of a 25% tariff on European Union (EU) imports and disappointing quarterly results from Nvidia rattled investors. According to Prashanth Tapse, Senior VP (Research) at Mehta Equities, these factors significantly dampened market sentiment.

Adding to the pressure, foreign institutional investors (FIIs) continued their steady outflows, intensifying the market downturn. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, pointed out that global weakness and profit-booking are pushing investors to hold cash positions amid uncertainty.

Markets thrive on stability, and Trump’s tariff moves have fueled volatility, according to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The Chicago Board Options Exchange’s (CBOE) Volatility Index (VIX), also known as the “fear gauge”, surged to 21.13, reflecting heightened investor anxiety and risk aversion.

Despite the turmoil, analysts believe a recovery could be on the horizon in March, driven by better macroeconomic conditions and easing FII outflows. Dr. Vijayakumar noted that large-cap stocks remain fairly valued, making them attractive for long-term investors. He suggested accumulating high-quality large-cap stocks, especially in the defense sector, which has recently seen significant corrections.

Prashanth Tapse warned that the Nifty is struggling to gain momentum. He identified key resistance at 24,074, with downside risks at 22,300 and 21,281. Traders are advised to short Nifty and Bank Nifty, with Adani Enterprises, MCX, and SBI remaining bearish in intraday trading.

The IT and auto sectors were among the hardest hit. Aditya Gaggar, Director of Progressive Shares, highlighted that Bajaj Auto and Hero MotoCorp broke key support levels, while the IT sector remains under pressure. The real estate sector also breached its previous swing support, signaling further downside risk.

While retail investors are understandably nervous, experts urge caution and long-term thinking. Instead of reacting impulsively, investors should focus on blue-chip stocks that have become fairly valued due to the correction.

Some brokerage firms recommend accumulating defense stocks, given their recent sharp declines, as a strong long-term investment opportunity.

Despite the short-term turbulence, analysts believe a market rebound is likely in March, driven by improving macroeconomic conditions and potential easing of FII selling. Patience, strategic stock selection, and a focus on long-term growth remain key for investors looking to navigate market volatility successfully.