Nifty, Sensex starts week in green following Asian rally, but FPI outflows, tariff concerns weigh on sentiment

MUMBAI: The Indian equity markets started the fresh week with gains in the opening session on Monday, taking positive cues from a rally across other Asian markets. The BSE Sensex index opened at 81,501.06, higher by 194.21 points, or 0.24 per cent, while the Nifty 50 began the day at 24,949.15, up 79.05 points, or 0.32 per cent.

However, foreign portfolio investor (FPI) outflows and concerns over additional tariffs remain key challenges for the domestic indices to sustain the momentum. Market experts pointed out that while Asian peers are cheering hopes of a possible rate cut in the United States, Indian markets face headwinds from tariff hikes and persistent foreign outflows.

Banking and market expert Ajay Bagga said that India will brace for additional tariffs of 25 per cent, which are scheduled to take effect from August 27. “The total tariffs of 50 per cent plus the existing MFN tariffs that were in place before the present Trump 2.0 tariff surge, make most Indian sectors unviable”, he said.

He further explained that Asian share markets are rallying as investors anticipate the likely resumption of interest rate cuts in the US and are also eyeing Nvidia’s results this week to justify high valuations in the technology sector.

“Emerging markets are seeing strong inflows based on country ETF data. Except India, which continued to see foreign portfolio outflows, while strong domestic flows ensure the market is not correcting sharply, though it has been an underperformer for over 12 months now versus both EMs and DMs”, Bagga added.

Experts highlighted that around $48 billion worth of Indian goods exports could be impacted, with sectors like textiles, gems and jewellery, and leather goods likely to face job losses, even as pharma and electronics remain exempted for now. At the same time, the upcoming GST Council meeting scheduled for September 3-4 is being watched closely for a possible indirect tax stimulus that may support slowing but still growing urban consumption.

In the broader market indices on the NSE, Nifty 100 rose 0.22 per cent, Nifty Midcap 100 gained 0.24 per cent, and Nifty Smallcap advanced 0.25 per cent, all reflecting the positive start. Sector-wise, barring Nifty Auto, Nifty FMCG, and Nifty Media, all others opened with gains. Nifty IT surged the most by 1.9 per cent, followed by Nifty Metal up 0.44 per cent, Nifty PSU Bank higher by 0.44 per cent, and Nifty Pharma up by 0.12 per cent.

Meanwhile, other Asian markets registered strong gains. Japan’s Nikkei 225 was up 0.27 per cent, Hong Kong’s Hang Seng jumped over 2 per cent, Taiwan Weighted rallied 2.44 per cent, and South Korea’s Kospi gained 1 per cent at the time of filing this report. (ANI)