Sensex and Nifty tumbled over 1 percent in early trade on Monday, tracking weak global cues and heightened concerns over US President Donald Trump’s reciprocal tariff threats. Persistent selling by foreign institutional investors (FIIs) further weighed on sentiment, adding to domestic market worries.
Sensex declined 856.66 points or 1.14 percent to 74,454.41, while the broader NSE Nifty fell 243.40 points or 1.07 percent to 22,552.50. All 13 major sectoral indices were in the red, with financial and IT stocks facing sharp losses, falling 1.4% and 2.2%, respectively. The Nifty Pharma index was the only gainer, edging up nearly 0.5 percent.
Among the biggest losers were HCL Tech, IndusInd Bank, Zomato, Tech Mahindra, Tata Consultancy Services, ICICI Bank, HDFC Bank, and Power Grid.
Key Factors Behind the Market Decline
1) Uncertainty Over Trump Tariffs: Markets remain on edge over Trump’s threat to impose reciprocal tariffs on India and China. US President Donald Trump has said that his administration will "soon" impose reciprocal tariffs on countries such as India and China. Trump was speaking at the swearing-in of Commerce Secretary Howard Lutnick on Friday when he made the announcement. Whatever a company or a country, such as let’s say India or China or any of them, whatever they charge, we want to be fair … so reciprocal. Reciprocal meaning, ‘they charge us, we charge them’,” Trump said in Washington.
"As we move ahead, foreign fund outflows and concerns over Trump’s tariff stance in his second term could keep investors cautious in this holiday-shortened week," said Ameya Ranadive, Chartered Market Technician and Senior Technical Analyst at StoxBox.
2) Relentless FII Selling: FIIs offloaded equities worth Rs 3,449.15 crore on Friday, extending their selling streak. So far this month, foreign investors have pulled out over Rs 23,710 crore from Indian markets, pushing total outflows past Rs 1 lakh crore in 2025 amid global trade concerns.
"The market is facing headwinds from relentless FII selling and global uncertainties over Trump tariffs. The sharp rise in Chinese stocks is another near-term challenge. In the US, long-term inflation expectations are rising, reducing the likelihood of an interest rate cut by the Federal Reserve," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Reuters quoted analysts saying that slowing growth in the world's largest economy does not bode well for export-driven sectors such as the information technology due to their high revenue contribution from the U.S.
3) Slowing US Growth Worries: US markets ended lower on Friday after economic data signalled slowing business activity and weakening consumer sentiment. Survey findings showed business activity in the US fell to a 17-month low, reflecting growing concerns over economic uncertainties. Adding to investor jitters, Walmart’s weaker-than-expected earnings guidance fuelled fears of slowing consumer demand.
What Technical Experts Say
Anand James, Chief Market Strategist at Geojit Financial Services, said that while the market has not seen a sharp breakdown, four consecutive sessions of decline have pushed Nifty to its lowest level since the downtrend began on September 27.
"We are now looking at a range of 22,580-22,300. A reversal could happen if Nifty avoids slipping further or swings back above 22,790. However, a firm break above 22,950 would confirm strength in the market," he said.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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