Indian stock markets opened under pressure on Monday as uncertainty over the US-India trade deal, a subdued start to the Q1 earnings season, and rising investor interest in IPOs weighed on sentiment.
The Nifty 50 opened at 24,999, gaining 30.60 points (0.12%), and the BSE Sensex started at 81,918.53, up by 160.80 points (0.20%). However, both indices quickly reversed early gains, reflecting weak investor confidence.
This cautious start follows three straight weeks of market losses, and it has now been ten months since the indices hit record highs in September 2024.
Key Market Pressures:
- Stalled India-US Trade Talks: Experts cite the lack of a breakthrough in the fifth round of talks as a major overhang. Market analyst Ajay Bagga noted that global trade is now pivoting toward multilateral FTAs amid diminishing US reliability.
- IPO Fund Diversion: A flood of IPOs and qualified institutional placements (QIPs) is pulling funds away from the secondary market. Promoters and PE firms diluting stakes are adding to the supply overhang.
- Weak Q1 Earnings: The early results from the June quarter have failed to inspire confidence, further dampening market enthusiasm.
Broad indices remained in the red:
- Nifty 100: -0.13%
- Nifty Midcap 100: -0.10%
- Nifty Smallcap 100: -0.10%
Sectorally, only Nifty Media, Metal, and Realty showed gains. Decliners included:
- Nifty Auto: -0.37%
- Nifty FMCG: -0.32%
- Nifty IT: -0.67%
- Nifty PSU Bank: -0.70%
Market expert Sunil Gurjar noted that Nifty’s recent bearish candles suggest a seller-dominated trend. He identified 25,250 as a key support zone and warned of further downside if it breaks. He also pointed to 24,650 as a critical support level that, if breached, could confirm a downtrend—though prices remain above major moving averages, indicating underlying strength.
A positive policy development may emerge as NITI Aayog has proposed automatic approvals for Chinese investments up to 24% in Indian firms. If approved, this could attract new foreign capital and signal diversification beyond US-aligned trade partners.
Overall, traders are adopting a wait-and-watch approach, looking for clarity on geopolitical risks, trade policy shifts, and earnings outlook before making fresh investments.