Indian markets open lower amid US tariff threat and FPI outflows

Indian equity markets opened in the red on Friday, weighed down by global trade uncertainties and continued foreign portfolio investor (FPI) outflows. Persistent concerns over a potential 500 per cent U.S. tariff on countries importing Russian crude added to selling pressure, keeping investor sentiment cautious.

The Nifty 50 opened at 25,840.40, down 36.45 points or 0.14 per cent, while the BSE Sensex slipped 183.12 points, opening at 84,778.02. Analysts said the market’s decline over the past four sessions, driven by fears of U.S. sanctions and tariffs, has pushed the indices into oversold territory. This suggests that while short-term volatility is high, there is potential for consolidation and recovery in the near term.

Ajay Bagga , banking and market expert, said, “After four consecutive days of losses, Indian markets may look to consolidate. Foreign portfolio investors have offloaded around USD 900 million worth of Indian shares in January so far, following record outflows of USD 19 billion in 2025. Nifty and Sensex have lost 1.7 per cent and 1.8 per cent, respectively, in the last four sessions. Indian markets are in an oversold zone and could see some recovery, provided global trade uncertainties ease.”

Broad-based selling was evident across wider indices. On the NSE, the Nifty 100 fell 0.15 per cent, Nifty Midcap 100 dropped 0.05 per cent, and Nifty Smallcap 100 declined 0.16 per cent. Sectoral indices also opened lower, with Nifty Auto down 0.12 per cent, Nifty IT declining 0.16 per cent, Nifty Pharma slipping 0.01 per cent, and Nifty Realty down 0.28 per cent.

Ponmudi R , CEO of Enrich Money, added, “Risk appetite remains subdued as global trade-related uncertainties continue to weigh on investor sentiment. Persistent concerns over potential U.S. tariff actions linked to India’s Russian oil imports have kept sentiment fragile, while the lack of progress in U.S.-India trade discussions reinforces institutional caution, particularly among foreign investors.”

Global cues will also influence market sentiment. Investors are awaiting the U.S. jobs report, expected to show around 70,000 jobs added in December, and the U.S. Supreme Court verdict on the legality of Trump-era tariffs . The decision could determine whether tariffs are struck down or refunded, potentially impacting U.S. government finances by USD 150 billion, and whether the administration can restore them through other legislative means.

The Indian stock market is currently in a cautious phase. Technical indicators suggest oversold conditions, which may attract short-term buying, but persistent global trade risks and foreign portfolio investor (FPI) outflows limit a strong rebound. The market appears to be consolidating around current levels, with the upcoming earnings season, Union Budget announcements , and global developments likely to dictate its near-term direction. While defensive sectors like defence, industrials, and railways could see selective gains, broad-based recovery will depend on easing global uncertainties and clarity on U.S. tariffs . These factors could further depreciate the Indian rupee , creating a vicious cycle where currency weakness fuels inflationary pressures and weighs on market sentiment.