Markets open weak amid US tariff fears and IT sector drag
The markets opened on a cautious note Monday morning, with the Nifty 50 falling 24.20 points or 0.10 per cent to 25,125.65 and the Sensex declining 112.40 points or 0.14 per cent to 82,388.07 as concerns over potential US tariffs on India and weakness in technology stocks weighed on investor sentiment.
The weakness follows US President Donald Trump’s announcement of 30 per cent tariffs on the European Union and Mexico starting August 1, sparking fears of a potential 500 per cent tariff shock on India. “While an interim US-India trade deal may soften tariffs below 20 per cent, markets remain edgy amid talk of a potential 500 per cent tariff shock on India,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Foreign Institutional Investors continued their selling spree, offloading equities worth ₹5,104 crore on July 11, contributing to the market’s subdued performance. The cumulative FII selling in July has reached ₹10,062 crore, adding pressure to domestic indices. However, Domestic Institutional Investors provided some support by investing ₹3,558 crore.
The technology sector emerged as the primary drag on Monday’s trading, with IT stocks extending their recent weakness. HCL Tech declined 1.43 per cent to ₹1,614.80, while Infosys fell 1.10 per cent to ₹1,577.30 and Tech Mahindra dropped 1.08 per cent to ₹1,585.20. The sector’s underperformance comes ahead of quarterly earnings from major IT companies this week.
“Nifty has been exhibiting a weak trend, weighed mainly by the weakness in IT stocks. This weakness may persist particularly since the FIIs were big sellers in the cash market last Friday,” noted Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.
Financial services stocks bucked the broader market trend, with several banking and non-banking financial companies posting gains. IndusInd Bank rose 1.26 per cent to ₹869.70, while Bajaj Finance declined 1.74 per cent to ₹917.25, making it the top loser among Nifty 50 constituents.
The metals sector showed resilience with Grasim Industries leading the gainers list, rising 1.34 per cent to ₹2,798.90, followed by Hindalco, which gained 1.27 per cent to ₹679.50. The performance of these cyclical stocks suggests selective buying interest despite the broader market weakness.
Auto stocks faced pressure with Eicher Motors falling 0.99 per cent to ₹5,557.00, while Mahindra & Mahindra bucked the trend with a 0.86 per cent gain to ₹3,099.70. The mixed performance in the auto sector reflects varied investor sentiment toward different segments.
Technical analysts remain bearish on the near-term outlook. “The market has nearly slid 500 points within two weeks, suggesting room for more in the upcoming sessions,” said VLA Ambala, Co-Founder of Stock Market Today. She recommended a “sell on rise strategy” and advised avoiding dip buying until the index reaches 24,500 levels.
Key support levels for the Nifty are seen at 25,120 and 25,000, while resistance lies at 25,220 and 25,300. “A sustained move above 25,378 could pave the way for an upward rally toward 25,500,” observed Hardik Matalia, Derivative Analyst at Choice Equity Broking Private Limited.
The banking sector showed relative strength despite the overall market weakness. “It is important to note that banking and financials are outperforming even in this weak market. This trend may persist,” Vijayakumar added, suggesting that “dips in banking stocks will provide opportunities to buy.”
Market participants are now focused on the upcoming earnings season, with results expected from NELCO, RALLIS INDIA, TEJAS NETWORKS, TATA TECHNOLOGIES, and HCL TECH today. The earnings trajectory will be crucial in determining market direction amid the current uncertainty.
“Market is expecting a US-India trade deal soon, with a tariff rate of around 20 per cent for India. If this happens the market will get a sentimental boost. Any disappointment on this front can drag the market down further,” Vijayakumar noted, highlighting the importance of trade negotiations.
Gold prices continued their upward trajectory, approaching $3,400 per ounce globally, as investors sought safe-haven assets amid trade tensions. “The potential for a rapid escalation has kept risk assets under pressure, prompting investors to seek safety in haven assets like gold,” said Aksha Kamboj, Vice-President of the India Bullion and Jewellers’ Association.
Looking ahead, traders are advised to maintain caution and follow a “sell on rise” strategy given the current volatility. “Fresh long positions should only be considered if the Nifty sustains above the 25,378 level,” Matalia recommended, emphasizing the need for risk management in the current environment.
Published on July 14, 2025
