Despite India’s Q4 FY25 GDP growing by a better-than-expected 7.4%, stock markets opened sharply lower on Monday, reflecting investor nervousness. By 9:25 am, the BSE Sensex had dropped 732.71 points to 80,718.30, while the NSE Nifty50 fell 197.45 points to 24,553.25. Broader indices also traded in the red, with rising volatility weighing on market sentiment across sectors.
Despite strong domestic data, investor sentiment appears weighed down by mounting global concerns.
“There are global headwinds like renewed tariff concerns that will restrain a breakout rally. At the same time there are domestic tailwinds that will support the market at lower levels,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He flagged fresh global trade tensions as a key worry for equity markets. “President Trump’s 50% tariffs on steel and aluminium is a clear message that the tariff and trade scenario will continue to be uncertain and turbulent. This headwind will impact markets,” Vijayakumar added.
Echoing similar concerns, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, warned of possible turbulence on Dalal Street. “Market turbulence looms amid escalating US-China trade tensions, with President Trump accusing China of violating their agreement,” Tapse said.
Still, India’s stronger-than-expected GDP growth offers some reassurance on the domestic front, indicating underlying economic resilience despite the market’s early jitters.
“On the domestic front the tailwinds are getting stronger with the latest Q4 GDP growth data coming at 7.4%, which is much better-than-expected. Trends in consumption expenditure and capital expenditure are promising,” Vijayakumar said.
“This along with low inflation and the expected continuation of the rate-cutting policy provide the perfect setting for sustained economic growth in FY26,” he noted, though he cautioned that corporate earnings growth remains a concern. “If leading indicators suggest a recovery in earnings growth there is a high probability of the market breaking out of the present range and moving higher.”
Adding to the risk-off mood, Devarsh Vakil, Head of Prime Research at HDFC Securities, said Indian markets were likely to stay subdued despite the GDP print due to “heightened fears of escalating conflict between Ukraine and Russia.”
NIFTY OUTLOOK
Technical indicators suggest that Nifty may struggle to break out in the near term.
“Persistent rejection trades seen last week on all upside attempts point towards the lack of momentum required for large upsides. We feel that a dip to 24,500 could improve such hopes. That said, slippage past the same could however expose 24,060, though a collapse is less expected,” said Anand James, Chief Market Strategist, Geojit Financial Services.
“Alternatively, direct rise above 25,077 could clear path for intermediate objective of 25,235–25,460,” he added.