Indian stock markets opened on a weak note, with both the Nifty 50 and BSE Sensex starting in the red. The decline is largely driven by continued selling pressure from Foreign Institutional Investors (FIIs) and growing concerns over global trade tensions.
The Nifty 50 began trading at 22,809.25, marking a slight drop from its previous close. Likewise, the BSE Sensex opened near its last closing level, extending its downward trend for the eighth consecutive session. Over this period, the Nifty has registered a cumulative decline of 3.2%, weighed down by factors such as sluggish earnings growth, high valuations, and trade-related uncertainties.
Market experts point to a significant liquidity squeeze, aggravated by FIIs pulling out nearly $11.5 billion from Indian equities. This aggressive sell-off is largely attributed to uncertainties surrounding global trade, particularly the recent U.S. decision to impose reciprocal tariffs on imports from multiple nations, including India. These protectionist measures have heightened fears of a global trade war, prompting investors to reassess their risk strategies.
Meanwhile, other Asian stock markets have shown relative resilience. The temporary suspension of U.S. reciprocal tariffs has provided some relief, resulting in rallies across several Asian indices. However, investor sentiment remains cautious as market participants closely watch ongoing trade discussions and geopolitical developments.
The downturn in Indian equities has been broad-based, with steep declines in small-cap and mid-cap indices. Last week, these segments recorded their worst performance since March 2020, plunging by 9.4% and 7.4%, respectively. The financial sector has also taken a hit, with leading banks and financial institutions experiencing notable stock price declines.
Overall, the combination of persistent FII selling and escalating global trade tensions continues to weigh on Indian stock markets. Investors are advised to remain vigilant and stay informed about global trade policy developments and their potential impact on domestic markets.
