Indian stock markets are set to open lower on Monday, mirroring the fall in the Asian peers, which took the baton from a bruised Wall Street on Friday as worries over the US economy and new tariff threats from President Donald Trump cast a cloud over world markets.
The Gift Nifty was signaling a gap down opening for the Indian markets. Nifty futures on the NSE International Exchange traded 150.60 points, or 0.66 per cent, lower at 22672.00, hinting at a negative start for the domestic market on Monday.
Indian markets faced selling pressure. A sharp sell-off on Wall Street, concerns over potential disruptions from Trump’s proposed tariffs, persistent US inflation, and the Federal Reserve’s cautious stance on rate cuts continued to weigh on investor sentiment, Choice Broking said in its note.
Foreign Institutional Investors (FIIs) have been aggressive sellers and renewed interest in rebounding Chinese stocks has led to a shift in global allocations, further impacting domestic equities, it added. “The overall bias for Nifty is sideways to bearish and the index formed a falling wedge pattern on the daily chart, indicating potential support and a possible rebound.”
On the other hand, the majority of the Asian stocks were trading lower on Monday amid the jittered sentiments. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.25 per cent. Japan’s Nikkei crashed 1.45 per cent; Australia’s ASX 200 shed 0.13 per cent; New Zealand’s DJ tanked 1.66 cent; China’s Shanghai fell 0.06 per cent; and South Korea’s KOSPI dropped 0.70 per cent.
US stocks tumbled on Friday, extending their selloff in the wake of dour economic reports with new tariff threats and worries of softening consumer demand. All three major US stock indices moved decisively lower on the heels of the data, and continued their slide. The Dow Jones Industrial Average fell 748.63 points, or 1.69 per cent, to 43,428.02, the S&P 500 lost 104.39 points, or 1.71 per cent, to 6,013.13 and the Nasdaq Composite dropped 438.36 points, or 2.20 per cent, to 19,524.01.
Beside the global indicators of growth and inflation, along with Trump’s tariff threats, rich valuations of the broader market leading to relentless selling by the overseas investors and sharp decline in the Indian currency are other major concerns for the equity market investors.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,449.15 crore on Friday, taking the overall outflow by overseas investors to Rs 23,710 crore in February so far. On the other hand, domestic institutional investors (DIIs) turned net buyers of Indian equities to the tune of Rs 2,884.61 crore.
FII selling continues unabated in the Indian stock market and the massive selling has resulted in the Nifty yielding negative returns of 4 per cent in 2025 so far, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. After Trump’s victory in US presidential elections, the US market has been attracting huge capital inflows from the rest of the world, he said.
Recently, China has emerged as a major destination of portfolio flows. Since Chinese stocks continue to be cheap, this ‘Sell India, Buy China’ trade may continue, Vijaykumar added. “Revival of FII investment in India will happen when economic growth and corporate earnings revive. Indications of that are likely to happen in two to three months.”
Persistent foreign portfolio outflows may keep the Indian rupee on the defensive this week with the currency taking cues from regional peers, while government bonds will react to liquidity infusions by the central bank. The rupee rose slightly week-on-week to settle at 86.7125 against the US dollar on Friday.
Although India’s long-term growth story remains strong, near-term valuation worries and concerns over sluggish corporate earnings have led to profit-booking, said Vaibhav Porwal, Co-Founder, Dezerv. “India continues to trade at a premium compared to other emerging markets and a strong dollar often attracts capital to US markets, considered safer and more stable,” he said.
Nifty and Nifty Bank levels to watch out
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said that the Nifty50 is currently placed at the crucial support of around 22,700 levels, but not showing any strength to bounce back from the said supports. “The underlying trend of Nifty remains choppy. A decisive downside breakout of the support of 22,700 could open the downside of around 22,450 levels in a quick period of time,” he said.
As long as Nifty Bank trades below the 20-day SMA, weak sentiment is likely to persist. Falling below this level could lead to a retest of 48,500, said Amol Athawale, VP-Technical Research, Kotak Securities. “Further downside may continue, potentially dragging the index down to 48,000. If it rises above the 20-day SMA or reaches 49,500, it could rally to the 50-day SMA, reaching levels of 50,000 and 50,250,” he adds.
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