Market Mayhem: Nifty Midcap 100 sinks 3%; 50% of index stocks crash up to 60% from recent highs

Midcap stocks today: The recent sell-off in the Indian stock market deepened further in today’s trading session, February 11, as a series of tariffs being exchanged between the world’s major superpowers created uncertainty among investors, raising concerns that it could drive up inflation.

Equities are the first casualties when global uncertainty spikes, driving investors to safeguard their wealth in safe-haven assets such as gold. This shift has already pushed gold prices up by 12% so far this year, leaving stocks vulnerable to further declines.

Stocks with extreme valuations are facing intensified selling pressure, with the Nifty Midcap 100 plunging 1,611 points, or 3%, to 50,859 in today’s trade. Over the last four trading sessions, the index has corrected 6.5%, reflecting broader market weakness. 

Ten index stocks, including Godrej Properties, Delhivery and Tata Chemicals touched fresh one-year lows. Moreover, 50% of the mid-cap stocks are now down between 31% and 60% from their respective one-year highs. 

Similarly, the Nifty Smallcap 100 index dropped 3.5% in today’s session, touching 15,944. The frontline indices also witnessed sharp declines, with the Nifty 50 and Sensex falling up to 1.3% during the day.

Trump’s tariff threats add to market jitters

Indian equities have been under pressure for the past five months, weighed down by the weak performance of Indian corporates over the last two quarters. This has led to EPS cuts for most stocks, raising concerns over stretched valuations.

The Union Budget and the RBI’s decision surprised the market, with the budget focusing on boosting consumption and the central bank providing additional stimulus by cutting the repo rate for the first time in five years. However, these measures failed to uplift investor sentiment, as weak corporate earnings overshadowed these positive triggers.

Adding to the challenges, the Donald Trump tariffs announcement deepens market concerns, raising fears of a full-blown global trade war as affected countries consider retaliation. 

Trump initial round of tariffs targeted Canada, Mexico, China, Germany, South Korea, Vietnam, and Japan. Additionally, he has warned of a universal 10% tariff on all imports entering the U.S. 

Reports indicate that he is set to announce reciprocal tariffs on Tuesday or Wednesday, which will take effect almost immediately, mirroring the tariff rates imposed by each country.

The Donald Trump administration on Monday announced a hike in tariffs on steel and aluminum imports to 25% “without exceptions or exemptions” and stated that plans for reciprocal levies on several countries would be unveiled within the next two days.

The tariff announcement followed China’s retaliatory measures, which were introduced last week. During his first term, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum.

Steel and aluminum are critical to industries such as automobiles, construction, and packaging. The new levies, set to take effect on March 4, could significantly impact the gross margins of car manufacturers and drive up construction costs if metal prices remain elevated.

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.