Indian equity benchmarks Sensex and Nifty closed lower on Monday, snapping a two-day winning streak. Investors booked profits amid weak global cues, as renewed trade tensions between the US and China shook confidence across Asian markets. Despite a mild recovery attempt during intraday trading, both indices failed to hold on to early gains, closing in the red by the end of the session.
The BSE Sensex ended at 82,327.05, down 173.77 points or 0.21 per cent, while the NSE Nifty50 settled at 25,227.35, down 58 points or 0.23 per cent. The market mood turned cautious as traders weighed the impact of US President Donald Trump’s comments on imposing “restrictive” tariffs on Chinese goods. His softened stance by Sunday did little to calm global investors, who fear that an escalation in trade hostilities could hurt global growth and corporate earnings.
Global Cues Pressure Domestic Markets
Asian markets traded weak throughout the day after Trump’s remarks reignited fears of a renewed US–China trade war. Investors across Asia reacted with caution, trimming positions in risk assets. Most major Asian indices, including Japan’s Nikkei, South Korea’s Kospi, and Hong Kong’s Hang Seng, traded lower.
The dollar strengthened as investors sought safety in US assets, while oil prices slipped due to demand concerns. The cautious global sentiment spilled over into Indian markets, where traders preferred to stay on the sidelines ahead of key inflation and industrial data releases later this week.
Market Breadth Turns Mixed
Domestic markets opened flat but drifted lower as the session progressed. Profit-taking in heavyweight sectors such as IT and FMCG dragged indices lower. Broader markets, however, showed a mixed performance. The Nifty MidCap 100 managed to close 0.11 per cent higher, signaling selective buying in mid-sized companies. Meanwhile, the Nifty SmallCap 100 slipped 0.17 per cent, indicating mild selling pressure in smaller firms.
Market breadth on the NSE remained slightly negative, with 28 stocks advancing and 22 declining on the Nifty50 index. Analysts noted that investors rotated funds into banking and financial stocks while trimming exposure in defensive sectors.
Sectoral Performance: IT and FMCG Lead Declines
Sectorally, Nifty IT and Nifty FMCG faced the most selling pressure. The IT index declined 0.78 per cent as global uncertainty weighed on export-oriented companies. Weak cues from the Nasdaq also hurt sentiment for Indian technology firms. Stocks such as Infosys, TCS, and HCLTech witnessed mild declines.
The FMCG sector fell 0.9 per cent, with profit-taking visible after a strong run in recent weeks. Hindustan Unilever (HUL) and ITC recorded losses, pulling down the broader index. Analysts said rising input costs and a cautious consumer spending outlook continue to limit upside potential for FMCG companies.
On the other hand, Nifty Financial Services gained 0.35 per cent, supported by buying in private lenders and NBFCs. Strong earnings outlooks and steady loan growth expectations helped financial stocks resist the broader market weakness.
Top Movers: Adani Ports and Bajaj Twins Outperform
Among Sensex constituents, Tata Motors, Infosys, HUL, and Power Grid emerged as the top laggards. Tata Motors’ stock slipped as investors locked in profits after a strong rally driven by expectations of improved performance in its JLR segment. Infosys fell in line with the broader IT sector weakness, while HUL faced selling pressure on valuation concerns.
On the gaining side, Adani Ports, Bajaj Finance, Bajaj Finserv, NTPC, and Axis Bank provided support to the market. Adani Ports rose on reports of strong operational performance and sustained cargo volume growth. The Bajaj twins extended their uptrend as analysts upgraded their earnings outlooks following steady loan demand trends. NTPC gained amid rising electricity demand and improving coal supply, while Axis Bank saw fresh buying from institutional investors.
Foreign and Domestic Flows Show Divergence
Foreign institutional investors (FIIs) turned cautious after last week’s rebound. Early data indicated that FIIs sold shares worth several hundred crores, reversing some of the recent inflows. Domestic institutional investors (DIIs), however, provided partial support by buying select large-cap stocks.
Market participants said FIIs are reacting to global macroeconomic signals, especially developments around US–China trade policy and the trajectory of US interest rates. Domestic investors remain more optimistic, betting on India’s stable economic outlook and corporate growth potential.
Analysts’ Views: Short-Term Caution, Long-Term Optimism
Market analysts believe the current decline is a healthy pause rather than the start of a deeper correction. The benchmarks have rallied strongly in recent weeks, and some profit-taking was expected. However, the next few sessions could remain volatile as traders monitor global developments and domestic data releases.
“Indian markets are likely to remain range-bound in the near term,” said an equity strategist at a leading brokerage. “Investors are cautious about external risks such as global trade tensions, oil price movements, and foreign capital flows. However, strong domestic fundamentals continue to support the long-term growth story.”
Another market expert noted that “any escalation in the US–China trade conflict could trigger risk aversion globally, but India remains relatively insulated due to its domestic consumption-driven economy.”
Economic Data in Focus
Traders now await India’s consumer inflation (CPI) and industrial production (IIP) data later this week. A softer inflation print could raise hopes of a more accommodative stance from the Reserve Bank of India (RBI), while strong industrial output would signal sustained economic momentum.
Global investors will also track US inflation data and statements from Federal Reserve officials for clues on future interest rate actions. Any signs of prolonged high US rates could pressure emerging markets, including India, as capital flows shift toward dollar-denominated assets.
Technical View: Nifty Faces Resistance at 25,400
On the technical front, analysts said Nifty faces immediate resistance near 25,400, while support lies around 25,100. A break below 25,100 could trigger further declines toward 24,950, while sustained buying above 25,400 may lead to a retest of the recent highs.
“The trend remains mildly negative in the short term, but investors should use dips to accumulate quality stocks in sectors such as banking, energy, and capital goods,” said a technical analyst. “IT and FMCG may remain under pressure due to global and cost-related headwinds.”
Outlook: Volatility Ahead but Fundamentals Strong
The near-term outlook for Indian markets remains cautious due to global uncertainties. Investors will likely track developments around US–China relations, oil prices, and global economic data. However, India’s robust growth trajectory, healthy corporate earnings, and strong domestic liquidity continue to underpin the medium-term outlook.
Analysts expect selective buying in sectors like financials, power, infrastructure, and manufacturing. Defensive sectors may underperform until global stability returns. Long-term investors are advised to stay focused on fundamentals rather than short-term fluctuations driven by global headlines.
In summary, Indian markets ended lower on Monday, mirroring weakness across Asia. The renewed trade tensions between the US and China dampened global risk sentiment, leading to profit-taking in key sectors. While the short-term picture looks volatile, India’s economic resilience and steady earnings growth provide a strong foundation for sustained long-term gains once global uncertainty eases.
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