Indian stock market: Softer-than-expected US inflation for February failed to lift investor sentiment in Thursday’s trade, March 13, as escalating trade tensions between major economies kept investors focused on their existing outlook, showing little interest in other global tailwinds. 

Against this backdrop, the Nifty 50 extended its decline for the second straight day, ending 0.33% lower at 22,397 points, while the Sensex wrapped up the session with a 0.27% drop at 73,828 points, marking its fifth consecutive session of losses.

The broader markets also closed in the red, with the Nifty Smallcap 100 index falling 1% to 14,897 points, and the Nifty Midcap 100 index tumbling 0.75% to 48,125 points.

Financial stocks fared well despite the market’s somber mood, as a drop in Indian retail inflation fueled expectations that the RBI may announce a second rate cut in its upcoming MPC meeting. The Consumer Price Index (CPI) inflation rate stood at 3.61% in February, marking a 65-basis-point decline from the previous month and the lowest inflation level since July 2024.

Meanwhile, the U.S. Consumer Price Index (CPI) also eased in February to 2.8% year-on-year, down from 3% in January, according to official data from the U.S. Bureau of Labor Statistics.

However, analysts noted the components that were mainly responsible for the cooling in price pressures will not feed into the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) price index.

The trade war between the U.S. and its trading partners, including Canada, Mexico, China, and the European Union, is intensifying, as these nations announce retaliatory duties on American goods in response to Donald Trump’s tariffs, escalating global trade tensions and raising fears of a potential U.S. recession.

Canada announced on Wednesday that it will impose 25% retaliatory tariffs on over $20 billion worth of U.S. goods, effective Thursday, according to a report by CNBC, citing Canadian Finance Minister Dominic LeBlanc. Separately, the European Union stated that it will impose counter-tariffs on up to 26 billion euros ($28.31 billion) worth of U.S. goods starting next month.

Following retaliation measures, Trump stated that the U.S. would respond to the European Union’s countermeasures against his new 25% tariffs on steel and aluminum, further increasing the risk of an escalating global trade war.

Amid the tit-for-tat tariff disputes, Goldman Sachs lowered its year-end target for the S&P 500, while J.P. Morgan warned of rising odds of a U.S. recession.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday maintained its global oil demand projections for 2025 and 2026, while warning of mounting economic uncertainty amid trade tensions.

Sectoral Performance: Financials edge higher; realty extends fall to 2nd day

Among the 13 major sectoral indices, only two ended in the green, with banks, especially PSU banks, emerging as the top gainers as hopes of another rate cut from the RBI strengthened following the February retail inflation print. The Nifty PSU Bank index finished the session with a 0.43% gain, while the Nifty Bank index ended the day with a mild gain of 0.01%.

On the losing side, Nifty Realty extended its losing streak for the second straight day, tumbling 1.83%, while Nifty Media also continued to remain under pressure, falling another 1.50%.

Other sectoral indices, including Nifty Auto, Nifty Metal, and Nifty Consumer, were among the biggest sectoral losers in today’s session.

Commenting on today’s market performance, “Vinod Nair, Head of Research, Geojit Financial Services, said, “The shortened trading week and sell-off in the US short market are providing a hiccup to the global market. However, India is withstanding with resilience and healthy outperformance by a narrow negative trend.”

“Even concerns that the US may have to bear a recession are not impacting the Indian market due to signs of recovery in fundamentals led by moderation in inflation, future rate cuts, and improvement in the economy in FY26 led by government spending and improvement in consumer income. However, if US policy continues to be tepid, it will become a point of concern,” he further added.

Technical Outlook

Rupak De, Senior Technical Analyst at LKP Securities, said, “Nifty has been forming a symmetrical triangle pattern on the hourly chart, which is a continuation pattern. For the past three days, Nifty has largely remained within the range of 22,350–22,550. A decisive move above 22,550 could trigger a meaningful rally in the short term. Conversely, a decisive fall below 22,350 could weaken sentiment in the short term.”

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.