Indian Stock Market Sees Modest Decline Amid Global Economic Uncertainty

Indian Equities End Two-Day Winning Streak

On Monday, the Indian stock market closed slightly lower, ending a two-day advance. This decline was mainly due to weakness in auto and financial stocks. The market sentiment remained fragile due to ongoing foreign outflows and uncertainty over a potential U.S.-India trade deal.

Key Market Indices

The S&P BSE Sensex fell by 54 points, or 0.06%, to finish at 85,213. The NSE Nifty 50 declined by 20 points, or 0.08%, to close at 26,027. Among the 30 stocks on the Sensex, shares of Mahindra & Mahindra, Maruti Suzuki, Adani Ports, Bajaj Finserv, and Titan were among the session's laggards, declining between 0.6% and 2%.

Broader Market Performance

Small-cap stocks saw a slight increase of 0.2%, while mid-cap shares slipped by 0.1%. The auto sector was the weakest performer, with a decline of 0.9%. JM Financial warned that auto and auto-component makers, along with aluminum-product companies, could be heavily impacted by Mexico's proposed tariff hikes.

Expert Insights

According to Vinod Nair, Head of Research at Geojit Investments, persistent foreign fund outflows and a weak rupee have kept the markets in a narrow range. Nair added that expectations of an earnings recovery in the second half of FY26, supported by monetary and fiscal growth drivers, are helping stabilize the market sentiment. Nair also stated that market momentum is expected to be earnings-led rather than valuation-driven in the future.

Global Market Trends

European equities saw a slight increase of 0.6% on Monday, while U.S. stock futures advanced, with S&P 500 e-minis up 0.4%. Asian markets were weaker, with the MSCI's Asia-Pacific index outside Japan falling 1.2%. The Japanese stocks found support after the Bank of Japan's tankan survey showed large manufacturers' sentiment at a four-year high.

Commodity Markets

Gold extended its rally for the fifth session, rising 1.1% to $4,348.83. Crude oil prices were little changed, with Brent crude edging up 0.25% to $61.27 a barrel and U.S. West Texas Intermediate gaining 0.26% to $57.59. The Indian rupee slid past the 90-per-dollar level, touching a fresh record low for the third straight session.