Nifty, Sensex open under pressure due to uncertainty over US-tariff, Q1 earnings and funds diversion to IPOs: Experts

NEW DELHI: Indian stock markets made a muted start on Monday, with both benchmark indices opening flat as investor sentiment remained weak amid ongoing uncertainty around the India-US trade deal.

The Nifty 50 index opened at 24,999, up by 30.60 points or 0.12 per cent, while the BSE Sensex opened at 81,918.53, registering a gain of 160.80 points or 0.20 per cent. Both indices declined in the early trading session, reversing the opening gains.

This came after markets posted three consecutive weeks of losses, and now mark ten months since Indian indices last touched their all-time highs in September 2024.

Experts say that the lack of progress in the fifth round of India-US trade talks is affecting investor confidence.

Ajay Bagga, Banking and Market Expert, told ANI that the failure to reach a breakthrough in the trade discussions is driving countries to look for multilateral Free Trade Agreements (FTAs) to reduce reliance on the US.

“The final signing of the Indo-UK FTA this week will be symbolic of a shift towards multilateralism in a post-Pan-Americana world,” he said.

Bagga emphasized that India should focus on entering new FTAs and improving existing ones, especially with ASEAN countries, where current trade terms have benefitted imports into India more than exports.

The uncertainty around US tariff policies and a weak start to the Q1 earnings season are keeping market sentiment under pressure. A potential US-India tariff agreement is seen as a possible trigger for market recovery.

Another factor influencing the market mood is the large supply in the IPO space. With several public issues and qualified institutional placements (QIPs) in the pipeline, investors are directing incremental funds into these offerings, putting pressure on secondary markets. Promoters and private equity funds also continue to dilute stakes, further adding to the supply overhang.

A potential positive development, as per experts, could come from the policy front. Niti Aayog has reportedly recommended allowing automatic approvals for Chinese investments of up to 24 per cent in Indian companies.

If implemented, this move could open the door to fresh Chinese capital inflows into India and send a clear signal to the US that India has other investment options.

On the NSE, all major broad market indices were trading under pressure. The Nifty 100 fell by 0.13 per cent, Nifty Midcap 100 dropped by 0.10 per cent, and Nifty Smallcap 100 also declined by 0.10 per cent.

Among sectoral indices, only Nifty Media, Nifty Metal, and Nifty Realty were trading in the green. Others showed weakness, Nifty Auto fell by 0.37 per cent, Nifty FMCG was down 0.32 per cent, Nifty IT lost 0.67 per cent, and Nifty PSU Bank declined the most by 0.70 per cent.

Commenting on market trends, Sunil Gurjar, SEBI-registered analyst and founder of Alphamojo Financial Services, said, “The Nifty 50 did not perform well last week, ending down by 181 points. Back-to-back bearish candles indicate that sellers are in control, which could push prices further down.”

He added that a breakdown below 25,250 would indicate a strong downtrend. “The 24,650 level could act as crucial support. If this breaks, it may confirm the continuation of the downtrend. However, technically, the price is still trading above key moving averages, suggesting underlying strength,” he noted.

Overall, investors remain cautious, waiting for clearer signals on trade, earnings, and global geopolitical developments before taking fresh positions. (ANI)