Indian equity markets started the week on a cautious note as persistent US tariff fears and aggressive foreign outflows overshadowed hopes of stronger corporate earnings. Benchmark indices Sensex and Nifty 50 slipped amid weak global cues, geopolitical risks, and rising uncertainty around inflation.
Author: Aditya Pareek | EQMint | Market News
The Indian stock market witnessed another subdued trading session on Monday, extending losses after its worst weekly performance in over three months. Lingering US tariff fears, coupled with sustained foreign outflows, weighed heavily on investor sentiment, offsetting early optimism surrounding the December-quarter earnings season.
Benchmark indices opened lower and remained under pressure through the morning session. The Nifty 50 slipped 0.41% to 25,578.16, while Sensex declined 0.49% to 83,167.82 as of 9:57 a.m. IST. The weakness in Sensex today and the broader Nifty 50 reflects growing nervousness among investors as global and domestic risk factors converge.
Market breadth painted a grim picture, with 14 out of 16 major sectoral indices trading in the red. Small-cap stocks fell 0.8%, while mid-cap indices declined 0.5%, indicating risk aversion across market segments.
US Tariff Fears and Geopolitical Risks Rattle Markets
One of the biggest overhangs for the Indian stock market continues to be escalating US tariff fears. Comments made last week by U.S. President Donald Trump on potential tariff hikes have reignited concerns about global trade disruptions. The absence of a concrete India–US trade agreement has further deepened uncertainty.
Analysts believe that rising geopolitical tensions, especially involving Iran and Venezuela, have amplified volatility across global financial markets. These risks have prompted investors to book profits in emerging markets like India, leading to sustained foreign outflows.
“Concerns over higher tariffs following recent US remarks have unsettled domestic markets, triggering profit-taking and intensifying foreign outflows,” said G. Chokkalingam, founder and head of research at Equinomics Research.
Foreign Outflows Continue to Weigh on Sensex and Nifty 50
Foreign portfolio investors (FPIs) remained net sellers in Indian equities, offloading shares worth ₹37.69 billion ($417.63 million) on Friday alone, according to provisional data. So far in January, foreign outflows have crossed $1.3 billion, following record withdrawals of nearly $19 billion in 2025.
These persistent foreign outflows have emerged as a major drag on the Indian stock market, particularly on heavyweight stocks that dominate the Sensex today and Nifty 50. Rising US bond yields and better risk-adjusted returns in developed markets are prompting global investors to rebalance their portfolios away from emerging economies.
Oil Prices and Inflation Add to Market Nervousness
Global crude oil prices remained flat after three consecutive sessions of gains, driven by fears of supply disruptions in Iran and Venezuela. Elevated oil prices are traditionally negative for oil-importing countries like India, as they widen the trade deficit and fuel inflationary pressures.
For the Indian stock market, higher crude prices translate into concerns over corporate margins, fiscal stability, and consumer spending. Investors are closely monitoring inflation data scheduled for release later in the day. According to a Reuters poll, India’s consumer inflation likely rose for the second consecutive month in December to 1.5%, driven by rising food prices and fading favorable base effects.
Any sharp uptick in inflation could limit the Reserve Bank of India’s policy flexibility, further impacting sentiment around Sensex today and the Nifty 50.
Earnings Season: A Ray of Hope for Indian Stock Market
Despite near-term headwinds, analysts believe that improving corporate earnings could provide some cushion to the Indian stock market. The December-quarter earnings season is expected to show modest recovery in select sectors, including banking, FMCG, and capital goods.
Stock-specific movements reflected this divergence. Shares of Tejas Networks plunged 8% after the company reported a net loss for the December quarter, compared to a profit in the same period last year. On the other hand, Avenue Supermarts, the operator of D-Mart, bucked the broader market trend and rose 3% after posting a robust 17% year-on-year rise in quarterly profit.
Such mixed earnings outcomes underline why investors are selectively positioning themselves within the Nifty 50 and broader indices rather than making broad-based bets.
What Lies Ahead for Sensex and Nifty 50?
Market participants are expected to remain cautious in the near term as US tariff fears, geopolitical risks, and foreign outflows continue to dictate market direction. Short-term movements in Sensex today and Nifty 50 are likely to be influenced by:
- Domestic inflation data
- Commentary from global central banks
- Progress on India–US trade discussions
- Earnings performance of index heavyweights
While volatility may persist, long-term investors could view sharp corrections in the Indian stock market as an opportunity to accumulate quality stocks with strong fundamentals.
Conclusion
The recent dip in the Indian stock market underscores the fragile balance between domestic growth optimism and global macroeconomic challenges. Persistent US tariff fears, rising geopolitical tensions, and relentless foreign outflows have clouded the outlook for Sensex today and the Nifty 50. However, with the earnings season unfolding and inflation data awaited, investors will be watching closely for signals that could stabilize sentiment and set the stage for a recovery in the weeks ahead.
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Resource link: Reuters
Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice.
