Indian markets open lower as US tariff threat, FPI outflows weigh on sentiment

MUMBAI: Selling pressure continued to hang over domestic equity markets in the opening session on Friday as benchmark indices opened in the red, weighed down by persistent 500 per cent US tariff threat on countries importing Russian crude and record foreign portfolio investor (FPI) outflows.

Market participants are now closely watching the upcoming earnings season to decide the further course of the markets. The NIFTY 50 index opened at 25,840.40, down by 36.45 points or 0.14 per cent, while the BSE Sensex began the day at 84,778.02, slipping 183.12 points or 0.22 per cent. Experts noted that after several sessions of decline, markets may attempt to stabilise at current levels.

Ajay Bagga, banking and market expert, said , “After four days of losses, Indian markets may look at consolidating and holding ground. Foreign portfolio investors have offloaded about USD 900 million worth of Indian shares in January so far, after record outflows of USD 19 billion in 2025. Nifty and Sensex have lost 1.7 per cent and 1.8 per cent, respectively, in the last four sessions, after U.S. threats of further sanctions on Russian oil purchases and a proposal to raise tariffs to 500 per cent on countries doing trade with Russia. Indian markets are in an oversold zone and could see some recovery”.

However, he added that markets are still awaiting clarity on what he termed the “triple catalysts.” These include earnings announcements starting next week, developments on the US tariffs front, and expectations from the Union Budget.

While earnings are expected to provide some stability, news flow on US tariffs has remained negative. On the Budget front, there is a street consensus that defence, industrial and railways stocks may benefit, though the overall Budget is not expected to offer significant tax concessions or a stimulus boost.

Broad-based selling was also visible across wider market indices. On the NSE, the Nifty 100 was down by 0.15 per cent, Nifty Midcap 100 slipped 0.05 per cent, and Nifty Smallcap 100 declined 0.16 per cent, indicating selling pressure across the broader market.

Sectoral indices also opened mostly in the red. Nifty Auto was down 0.12 per cent, Nifty IT declined 0.16 per cent, Nifty Pharma slipped 0.01 per cent, and Nifty Realty fell 0.28 per cent, reflecting high selling pressure across major sectors.

Ponmudi R, CEO of Enrich Money, said, “Indian equity markets enter today’s session with a cautious undertone following the sharp sell-off in the previous trading day. Risk appetite remains subdued as global trade-related uncertainties continue to weigh on investor sentiment. Persistent concerns over potential U.S. tariff actions linked to India’s Russian oil imports have kept sentiment fragile, while the lack of visible progress in U.S.-India trade discussions is reinforcing institutional caution, particularly among foreign investors”.

On the global cues front, two key events are expected to influence sentiment later in the day. These include the US jobs report, which is expected to show around 70,000 jobs created in December, and the US Supreme Court verdict on the legality of the Trump tariffs.

The Supreme Court’s decision is seen as crucial for markets. Key points to watch include whether the court strikes down the Trump tariffs as invalid, whether it orders a refund of tariffs collected–an outcome that could have a USD 150 billion impact on US government finances, and how the Trump administration may seek to restore tariffs through other legislative options. (ANI)