Indian Markets Stay Flat Amid US Tariff Uncertainty and Global Cues

Mumbai, 7 July 2025: Indian equity benchmarks ended largely unchanged on Monday as investors adopted a cautious stance ahead of a crucial July 9 deadline for fresh US tariff decisions. A combination of global uncertainties, weak cues from Asian markets, and persistent foreign fund outflows contributed to the subdued market sentiment.

Sensex Ends Slightly Higher, Nifty Remains Flat as Investors Stay Cautious

The BSE Sensex closed with a marginal gain of 9.61 points or 0.01%, settling at 83,442.50. The index moved within a narrow band throughout the day, touching an intraday high of 83,516.82 and a low of 83,262.23.

The NSE Nifty, meanwhile, ended flat at 25,461.30, reflecting low-risk appetite as traders avoided large positions ahead of expected macroeconomic triggers.

Tariff Uncertainty and Global Events Weigh on Market Mood

Expected US import duties add pressure to already cautious sentiment

The primary source of hesitation among investors was the looming end to the 90-day suspension of Trump-era tariffs, particularly those impacting Indian exports. A proposed 26% additional duty on certain Indian goods entering the US is generating concern across sectors, including textiles, auto parts, and pharmaceuticals.

“The Nifty opened at 25,450, traded within a tight range between 25,407 and 25,489, and ended flat. The market is waiting for clarity on the US tariff policy. Until then, volatility may persist,” said Sundar Kewat, Technical and Derivatives Analyst at Ashika Institutional Equity.

Top Gainers Reflect Defensive Play; Select Laggards Drag

Investors favour low-beta and FMCG stocks over cyclical counters.

On the Sensex, gains were led by defensive stocks and large-cap favourites:

• Hindustan Unilever
• Kotak Mahindra Bank
• Trent
• Reliance Industries
• Asian Paints
• ITC

In contrast, stocks such as Bharat Electronics Ltd, Tech Mahindra, UltraTech Cement, Maruti, and Eternal were among the day’s top laggards.

The shift indicates a preference for safe-haven bets amid global uncertainty, with IT and auto stocks seeing selective selling on tariff-related concerns.

Global Market Trends Offer Mixed Signals

Asian and European indices diverge as investors weigh inflation and trade concerns

Asian markets presented a mixed picture:

• Nikkei 225 (Japan) and Hang Seng (Hong Kong) ended in the red.
• Kospi (South Korea) and SSE Composite (China) closed in positive territory.

At the time of closing in India, European markets were also trading mixed, with no decisive cues for direction. Meanwhile, US markets had closed higher on Friday, offering limited relief to domestic investors.

Additional Indicators Reflect Cautious Outlook

Rising crude prices and persistent FII selling pressure add to investor concerns.

• Brent crude prices edged up 0.29%, reaching $68.50 per barrel, raising concerns over cost inflation and its impact on India’s import bill.
• Foreign Institutional Investors (FIIs) continued to exit Indian equities, selling shares worth ₹760.11 crore on Friday, contributing to weak near-term sentiment.

Momentum Slows After Friday’s Rally as Fresh Uncertainty Weighs on Markets

In the previous trading session on Friday, the Sensex had risen 193.42 points to 83,432.89, while the Nifty gained 55.70 points, closing at 25,461.30. However, Monday’s session failed to extend that momentum as macroeconomic concerns and global developments took centre stage.

The Broader Picture: What Lies Ahead

Tariff decision, inflation data, and Q1 earnings to guide market direction

Market analysts believe the upcoming US tariff announcement, June inflation data, and the beginning of the Q1 FY26 earnings season will be key drivers for Indian equities in the short term. With limited room for speculation and high sensitivity to global events, the market may remain in consolidation mode unless significant policy clarity emerges.

Investors are advised to watch macro indicators closely and maintain a balanced portfolio approach, focusing on sectors with stable earnings visibility and lower external vulnerability.

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