Sensex and Nifty traded lower on Friday, shedding early gains, as concerns over US President Donald Trump's reciprocal tariff policy and persistent foreign investor outflows dampened sentiment. Weak corporate earnings also added to the pressure.
Sensex dropped 699.33 points or 0.91 percent, to a low of 75,439.64, while the broader NSE Nifty slipped 256.55 points or 1.11 percent to 22,774.85. All sectoral indices were in the red, with Adani Ports, Zomato, Sun Pharma, and NTPC among the top laggards.
Key Factors Driving Market Weakness
1) Trump's Reciprocal Tariffs Create Uncertainty: Investor sentiment took a hit after Trump reiterated his stance on imposing reciprocal tariffs on trade partners, including India. "Whatever India charges, we will charge them," Trump said. While Prime Minister Narendra Modi and Trump discussed an ambitious trade deal, with a target of USD 500 billion in bilateral trade by 2030, details remain unclear. Experts believe the uncertainty surrounding tariff structures could weigh on investor confidence.
"Reciprocal tariff is a highly complex issue, as multiple factors will influence US customs duty decisions," trade policy expert Abhijit Das told PTI.
2) Relentless Foreign Investor Selling: Foreign institutional investors (FIIs) continued their selling spree, pulling out Rs 19,077 crore from Indian equities so far this month. This follows a massive Rs 78,027 crore sell-off in January. The ongoing weakness in the rupee, coupled with global economic uncertainties has fueled the outflows. FIIs offloaded equities worth Rs 2,789.91 crore on Thursday.
3) Weak Q3 Earnings Weigh on Sentiment: Disappointing third-quarter earnings further dampened market sentiment. Companies such as Natco Pharma, Senco Gold and Deepak Nitrite reported weak results, adding to concerns over corporate growth. FMCG firms continued to witness volume pressures, reflecting sluggish consumer demand.
What Technical Analysts Say
According to Anand James, Chief Market Strategist at Geojit Financial Services, the Nifty faced resistance at 23,220, reversing gains from the previous session. The index, however, found support around 23,000, preventing further downside.
“The upside target of 23,430 remains intact, but a failure to sustain above 23,220 or a slip below 23,000 could weaken momentum. A break below 22,800 would require reassessing the trend,” James noted.
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