India’s benchmark indices opened on a cautious note Monday, as uncertainty surrounding the India-US trade deal weighed on investor sentiment and capped early gains.
The Nifty rose 30.60 points, or 0.12 per cent, to open at 24,999, while the Sensex added 160.80 points, or 0.20 per cent, to start at 81,918.53. However, both indices quickly gave up their gains. By 9:20 am, the Sensex had slipped 50 points, or 0.05 per cent, to 81,714, and the Nifty was down 17 points, or 0.07 per cent, at 24,951.
Analysts attribute the weak start to investor unease over the lack of progress in the fifth and latest round of India-US trade negotiations.
“The failure to reach a breakthrough in the trade talks is pushing countries to pursue multilateral FTAs to reduce reliance on the US,” said Ajay Bagga, banking and market expert. “The final signing of the India-UK FTA this week will symbolize a broader shift towards multilateralism in a post-Pan-Americana world.”
India and the UK had concluded negotiations on their FTA in May. Bagga stressed the need for India to deepen trade ties through new and existing FTAs, especially with ASEAN countries, where current terms favor imports over exports.
Adding to the market pressure are concerns over a lackluster Q1 earnings season and ongoing uncertainty around US tariff policies. A potential US-India tariff deal is being closely watched as a possible trigger for market recovery.
Another factor influencing sentiment is the flood of primary market activity. With several large IPOs and qualified institutional placements (QIPs) lined up, investors are diverting funds away from the secondary market. Promoters and private equity firms continue to dilute stakes, adding to the supply overhang.
Meanwhile, a potentially positive development could emerge on the policy front. The NITI Aayog has reportedly recommended allowing automatic approvals for Chinese investments of up to 24 per cent in Indian companies, a move that could revive Chinese capital inflows and signal India’s openness to alternatives beyond the US.
On the NSE, all major broad-market indices were under pressure. The Nifty 100 dropped 0.13 per cent, Nifty Midcap 100 slipped 0.10 per cent, and Nifty Smallcap 100 fell by 0.10 per cent.
Sectorally, only Nifty Media, Nifty Metal, and Nifty Realty showed gains. The rest lagged, with Nifty Auto down 0.37 per cent, Nifty FMCG lower by 0.32 per cent, Nifty IT falling 0.67 per cent, and Nifty PSU Bank declining the most, by 0.70 per cent.
“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,” said Sunil Gurjar, SEBI-registered analyst and founder of Alphamojo Financial Services. “A breakdown below 25,250 would signal a strong downtrend. The 24,650 level could act as crucial support. If breached, it may confirm further downside. That said, prices remain above key moving averages, hinting at underlying strength.”
(With inputs from ANI)
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