Sensex, Nifty today: Stock market indices fell in Monday's trade, as sustained foreign outflows dampened investor sentiment. A mixed set of quarterly earnings, ahead of Union Budget 2025, is making investors jittery and so is Donald Trump's imposition of 25 per cent tariffs on all Colombian goods entering the US, which raised fresh concerns over tariff wars ahead.
VK Vijayakumar of Geojit Financial Services said the market sentiment has turned weak and a sustained FPI selling -- Rs 69,000 crore in January, so far -- is impacting the market.
"Despite DII buying of Rs 67,000 crore in January, the market is under pressure. A major concern is that the US President is coming up with new threats like the 25 per cent tariff on Columbia for its refusal to take back deported illegal immigrants. The threatened 25 per cent tariff on Canada and Mexico might be implemented from February 1st onwards," Vijayakumar said.
The real question, the stock market is seeking answers to is whether Trump walk his talk on other threats including tariffs on China and other countries. These concerns are weighing on the markets.
Sensex, Nifty take hit
The BSE Sensex declined 742 points or 0.97 per cent to 75,448.32. Nifty stood at 22,857.15, down 235 points or 1.02 per cent. Zomato Ltd declined 2 per cent to Rs 211 and was the worst Sensex performer. IndusInd Bank Ltd, Adani Ports, Tata Motors Ltd, Infosys Ltd, Tech Mahindra Ltd, NTPC Ltd, HCL Technologies Ltd and Infosys Ltd fell over 1 per cent each.
Axis Bank, HDFC Bank, Power Grid and Bharti Airtel were also hit hard. "While tariffs may still play a role, Trump’s administration is likely to adopt a more targeted approach. Following the “Small Yard, High Fence” principle, tariffs and restrictions would be concentrated on sectors that pose risks to economic and national security. This strategy ensures that measures are precise and limited, minimizing unnecessary disruption while addressing critical concerns. China, a focal point of Trump’s trade policies, is expected to face targeted tariffs on key sectors, particularly those tied to advanced technology or industries deemed strategically significant," YES Securities said.
Budget 2025 expectations Ankita Pathak, Chief Macro and Global Strategist at Ionic Wealth said the stock market will try to rule out bad news in the Budget. No news is likely to be good news, she said.
There could be some positives for housing, capital intensive sectors and consumption but gross budgetary support must be meaningful, she said.
"The first full year budget under Modi 3.0 will continue to be interesting, but the real benchmark of a good fiscal policy are credibility and continuity. On these parameters, the past few budgets have delivered well. For FY25, we believe the fiscal deficit can be lower (our estimate is 4.7%) than the budgeted 4.9% despite the growth slowdown, given the lower capital expenditure in the year and additional revenue from RBI dividends," Pathak said.
What's next?
The coming days will be the US Fed rate cut decision (January 28-29) and the Union Budget (February 1) in India. The market is looking forward to fiscal stimulus through income tax cuts in the Budget. If the expectations are met, there can be a relief rally in the market, Vijayakumar said.