Stock markets open lower amid cautious global cues, FPI selling and trade deal uncertainty

MUMBAI: Domestic equity markets opened lower on Monday amid cautious global cues, continued foreign investor selling and uncertainty around key global central bank actions, as investors remained in a wait-and-watch mode for positive triggers such as a favourable US-India trade deal.

The Nifty 50 index opened at 25,956.50, slipping by 90.00 points or 0.35 per cent, while the BSE Sensex started the session at 85,034.92, declining by 232.74 points or 0.27 per cent.

Market experts said the weak opening was driven by a combination of global market pressure, lack of fresh domestic catalysts and continued concerns over foreign portfolio investor (FPI) outflows and currency movement.

Ajay Bagga, Banking and Market Expert, told ANI that Indian markets have been in a prolonged waiting phase. “Indian markets are ‘Waiting for Godot’ in a wait mode since February 2025 for a ‘favourable’ US trade deal. PM Modi spoke to President Trump last week, and a US trade delegation had another round of discussions with their Indian counterparts,” he said.

He added that despite the absence of strong positive triggers, the low level of market volatility reflects muted expectations. “The good news is that markets are very skeptical and VIX is at a very low level, a pointer to diminished expectations and lack of catalysts,” Bagga said.

Bagga further noted that FPIs have sold heavily this year and remain cautious due to the weakening rupee. “FPIs have sold massive amounts this year and continue to watch the falling Rupee with trepidation. Any positive catalyst like an Indo-US trade deal and a booster dose from the Union Budget 2026 could lead to a sharp ‘catch up’ trade in Indian markets,” he said, adding that he remains optimistic about the long-term India story.

In the broader markets, weakness was visible across segments. The Nifty 100 index was down by 0.40 per cent, while the Nifty Midcap index fell by 0.36 per cent. The Nifty Smallcap index also slipped by 0.06 per cent, indicating broad-based selling pressure.

Sectorally, most indices on the NSE opened in the red, reflecting overall cautious sentiment. Nifty Auto declined by 0.84 per cent, Nifty IT lost 0.55 per cent, Nifty Pharma fell by 0.70 per cent, Nifty PSU Bank slipped by 0.32 per cent, and Nifty Private Bank was down by 0.26 per cent. Only Nifty Media and Nifty Metal indices managed to open without losses.

Ponmudi R, CEO of Enrich Money, said “Indian equity markets are set to begin today’s session on a cautious note, tracking softer global cues as Asian markets trade under pressure, fostering a mild risk-off environment. The broader domestic market structure remains constructive, underpinned by robust internal liquidity and orderly price action around key technical support zones, which continues to cushion downside risks and keep the medium-term bias intact”.

Global factors also weighed heavily on sentiment. Investors are closely watching major central bank actions this week, including the European Central Bank, which is expected to remain on pause, the Bank of England, which is expected to cut rates, and the Bank of Japan, which is expected to hike rates by 25 basis points.

The Japanese government’s announcement of a stimulus package of over USD 110 billion has added to uncertainty, as tighter monetary policy could impact global capital flows and the carry trade.

Meanwhile, weakness in global equity markets further pressured sentiment. US stocks fell last week after a sell-off in AI-related stocks. This weakness extended into Asian markets on Monday morning.

Additionally, Chinese retail sales, industrial production and investment data came in below expectations, adding to the negative mood. (ANI)