India’s benchmark stock indices fell sharply on Monday morning despite stronger-than-expected GDP data, as investor sentiment remained clouded by global trade tensions and geopolitical uncertainty.
At around 9:25 am, the BSE Sensex dropped 732.71 points to 80,718.30, while the NSE Nifty50 slipped 197.45 points to 24,553.25. Broader market indices mirrored the sell-off, with most trading in the red amid heightened volatility.
The sharp decline followed the announcement that India’s GDP for the fourth quarter of FY25 had grown at 7.4 per cent, beating expectations and indicating strong domestic economic fundamentals.
However, mounting global headwinds appeared to have outweighed the domestic tailwinds, curbing investor appetite and shaking confidence.
“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 attributed the negative sentiment to recent developments in global trade, stating, “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.”
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Echoing the outlook, Prashanth Tapse, Senior Vice President (Research) at Mehta Equities Ltd, said, “Market turbulence looms amid escalating US-China trade tensions, with President Trump accusing China of violating their agreement.”
Despite these concerns, many analysts remain cautiously optimistic due to the strength of India’s economic indicators.
“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 added.
He further noted, “This along with low inflation and the expected continuation of the rate-cutting policy provide the perfect setting for sustained economic growth in FY26,” although 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,” he said.
Devarsh Vakil, Head of Prime Research at HDFC Securities, highlighted further risks from overseas developments: “Indian markets were likely to stay subdued despite the GDP print due to heightened fears of escalating conflict between Ukraine and Russia.”
Meanwhile, technical analysts are closely monitoring support levels on the Nifty.
“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 at Geojit Financial Services.
“Alternatively, direct rise above 25,077 could clear path for intermediate objective of 25,235–25,460,” he added.
While domestic economic prospects remain favourable, global turbulence and corporate earnings anxiety continue to weigh heavily on Indian equities.
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