Stock market today: Nifty 50, Sensex end lower as soft US inflation data fails to ease tariff jitters

The softer-than-expected retail 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 domestic tailwinds.

Against this backdrop, the Nifty 50 extended its decline for the second straight day, ending 0.34% lower at 22,395 points, while the Sensex wrapped up the session with a 0.23% drop at 73,856 points, marking its second consecutive session of losses.

The broader markets also closed in the red, with the Nifty Smallcap 100 index falling 1% to 14,899 points, and the Nifty Midcap 100 index tumbling 0.9% to 48,114.50 points.

Financial stocks fared well despite the market’s somber mood, as a drop in retail inflation fueled expectations that the RBI may announce a second rate cut. 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.

Meanwhile, 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.