India’s equity benchmarks, Sensex and Nifty 50 opened lower on February 10, as global trade tensions cast a shadow over risk appetite. Metal stocks led losses after US President Donald Trump said he would impose new tariffs on all steel and aluminium imports into the US, in addition to further reciprocal tariffs.
At 10:23 AM, the Sensex was down 560 points or 0.7 percent at 77,300, and the Nifty was down 172 points or 0.7 percent at 23,387. About 963 shares advanced, 2,423 shares declined, and 131 shares were unchanged. The broader markets were trading in deeper red with the NSE Midcap and Smallcap indices slipping 1.5% and 1.8%, respectively
Market sentiment remains largely negative, weighed down by FII outflows, tariff tensions, and weak Q3 earnings. "There has not been any such sort of news or announcements which can change the direction of the market. Trump issue-all his announcements and the volatility, is going to continue," said Ambareesh Baliga, an independent market analyst.
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On February 7, Trump vowed to slap tariffs on multiple countries as early as February 11 or 12, intensifying his push to level the playing field in America's favour. Taking things a step further, he revealed plans for a steep 25 percent tariff on all steel and aluminium imports, a move that could have far-reaching consequences for global trade flows.
Indian Prime Minister Narendra Modi is reportedly preparing tariff concessions to sweeten the deal ahead of his meeting with Trump, aiming to defuse tensions and prevent a full-blown trade war.
Foreign Institutional Investors (FIIs) have dumped Rs 10,179 crore worth of Indian equities so far in February, as higher U.S. interest rates and a stronger dollar erode the appeal of emerging markets.
The Indian rupee hit a record low, mirroring losses in Asian currencies after U.S. President Donald Trump announced plans for additional tariffs. The rupee weakened by 49 paise, opening at an all-time low of 87.92 per dollar.
"It's a natural reaction. When the rupee is weak, dollar-denominated returns don’t look attractive to foreign investors and hence FIIs are likely to continue pulling out funds," said Baliga. "Earnings haven’t been strong enough to provide any meaningful support to the market either," he added.
Also Read | Rupee hits new record low of 87.96 on Trump's new tariff plans
Among sectoral indices, financials, oil & gas, and metals weighed on the Nifty, while auto, telecom, and FMCG provided support.
The metals index dropped 2 percent after Trump announced a 25 percent tariff on U.S. steel and aluminium imports, along with reciprocal tariffs matching each country's levy. SAIL, Tata Steel, and Vedanta led the metal index slump, dropping 4 percent each.
Tata Steel, JSW Steel, Cipla, Power Grid, and Hindalco led the declines on the Nifty 50, slipping 1-2 percent, while Bharti Airtel, Adani Ports, M&M, BEL, and Britannia topped the gainers' list, climbing 1-2 percent.
The Sensex and Nifty ended lower in the previous session after the Reserve Bank of India’s (RBI) Monetary Policy Committee lowered the repo rate by 25-basis-point rate cut—the first in nearly five years—to 6.25 percent.
Baliga noted that the RBI’s recent rate move was largely expected, preventing a sharper market reaction. "Had the RBI not made this move, the market reaction would have been more negative. However, since it matched expectations, the impact is largely neutral."
U.S. markets slumped on February 7, with all three major indexes closing lower after Trump’s tariff threats sent shockwaves through global markets. Weak jobs data and fading consumer sentiment further compounded investor worries. Asian markets mirrored the jitters, trading mixed today as Wall Street futures pointed lower.
Markets will now closely watch CPI inflation data from both India and the U.S., set for release on February 12.
From a technical perspective, Anand James, Chief Market Strategist at Geojit Financial Services sees 24,380–24,426 as the next upside target for Nifty 50 with 24,226 acting as an intermediate resistance. On the downside, failure to break above 23,800 or sustain above 24,020 after an initial rally could weaken bullish momentum, as per James.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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