Sensex, Nifty to open lower on tariff jitters, Q1 in focus
US President Donald Trump’s fresh tariff letters to key trading partners like Japan and Korea have dampened sentiment, especially as India-US trade talks remain unresolved.
Indian benchmark indices, the Sensex and Nifty, are likely to open on a negative note on Tuesday amid a tariff threat. As the India-US trade negotiations drag on, analysts expect the market to remain volatile. The fresh “tariff” letters signed by US President Donald Trump to over a dozen countries, including Japan and Korea, warning of steeper duties if trading partners retaliate with counter-tariffs, have put the marksmen once again in a cautious mood.
The GIFT Nifty at 25500 indicates that the Nifty could see a negative bias at the opening. The focus will also be on the upcoming results season.
Earnings to pick up
“While the Indian equity market has underperformed emerging markets in CY25 year-to-date, it has still posted a 6% rise despite facing its own geopolitical challenges and potential war threats. Amid global uncertainty and market volatility, India stands out as a beacon of relative macroeconomic stability. With improving fundamentals, robust domestic flows, and policy firepower, the stage is set for a broad-based revival in growth and earnings. MOFSL expects PAT growth of 14% for its universe in FY26, versus 4% in FY25,” said Motilal Oswal Financial in a note.
According to the domestic brokerage, Q1-FY26 is being dubbed the “Crossover Quarter”for a reason—it marks a turning point from FY25’s subdued earnings cycle to a fresh, more sustainable uptrend. Despite macro and geopolitical headwinds, bottom-up estimates indicate MOFSL/Nifty earnings will grow 10%/5% YoY in 1QFY26, with acceleration expected across subsequent quarters. The underlying message is clear: India Inc.’s earnings recovery is already underway.”
Meanwhile, F&O trading signals a cautious outlook for markets.
Sentiment in the derivatives space has shifted slightly to a cautious tone. Call writers have strengthened their positions at higher levels, indicating growing supply pressure. Simultaneously, put writers have begun unwinding their exposure, suggesting expectations of a consolidation or minor pullback, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
The Put-Call Ratio (PCR) remains stable at 0.79, indicating a mildly bearish tone due to elevated call writing activity. Max Pain has now shifted to 25,450, indicating that this level may act as a magnetic zone as we head into the weekly expiry.
India VIX edged higher by 1.99%, closing at 12.56, still comfortably below its psychological threshold of 15. The persistently low volatility reflects a lack of fear and suggests a stable market environment, typically favouring a gradual upward grind rather than sharp moves, he added.
Asian stocks, however, remained resilient as they eked out marginal gains in early trade on Tuesday.
Published on July 8, 2025
