Indian equity markets deepened their losses in afternoon trade on Monday, with benchmark indices extending their decline amid continued selling pressure and lingering concerns over global trade tensions. The BSE Sensex was trading at 83,038.96, down 531.39 points or 0.64% from its previous close, while the NSE Nifty 50 stood at 25,524.60, lower by 169.75 points or 0.66%.

Trump's Tariff Threats Continue to Weigh

The primary catalyst for the market decline remained US President Trump's fresh tariff threats against European allies supporting Denmark over Greenland control. Trump announced plans to impose an additional 10% import tariff from February 1 on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland, and the UK, with rates escalating to 25% from June 1 if no agreement is reached.

The resurfacing of the tariff war has sparked a risk-off sentiment across global equities, with trading sentiment remaining fragile following these fresh threats.

Mixed Performance Among Index Constituents

While the broader market remained under pressure, individual stock performance showed divergence. Tech Mahindra emerged as the top gainer on the Nifty, rising 3.68% to ₹1,732.00, followed by InterGlobe Aviation which gained 3.34% to ₹4,898.50.

On the losing side, Wipro remained the biggest laggard, slumping 7.07% to ₹248.55 after forecasting weaker-than-expected revenue growth. Reliance Industries fell 3.61% to ₹1,405.30, while ICICI Bank shed 2.86% to ₹1,370.40.

Broader Market and Sectoral Performance

Market breadth remained weak, with declines outnumbering advances 2,920 to 1,164 on the BSE. As many as 346 stocks touched their 52-week lows compared to 86 that hit 52-week highs, indicating broad-based selling pressure.

Flight to Safe Haven Assets Continues

Risk aversion continued to drive a sharp rally in precious metals, with investors seeking safety amid geopolitical tensions. Silver futures crossed the ₹3.00 lakh per kg mark for the first time, while gold rebounded strongly to record highs in global markets.

The sustained foreign fund outflows and global trade uncertainty continue to weigh on market sentiment, with investors closely monitoring developments on the tariff front and upcoming corporate earnings.

Indian equity markets are showing early signs of stabilisation after weeks of volatility, with the Nifty consolidating around key support levels. Technical analyst Nagaraj Shetti from HDFC Securities has identified potential bottom formation signals that could indicate a market reversal.

Speaking to ET Now, Shetti highlighted that the index has been experiencing high volatility near the 25,500–25,600 zone, but consistent buying from lower levels suggests a potential bottom reversal in the making.

Nifty Technical Outlook: Strong Support Base Emerges

The technical analysis reveals that Nifty has repeatedly found support near 25,500, indicating strong buying interest at these levels. Shetti noted that the market has been consolidating around these levels, with the last two sessions confirming that 25,600 is acting as a solid base.

On the upside, 26,000 remains the immediate hurdle. Shetti expects some consolidation near 26,000, but once crossed, the index could move towards 26,200–26,300 in the near term, while advising caution amid ongoing volatility.

Sector Rotation Favours Metals and Oil Refining

According to Shetti, sector rotation is clearly visible, with renewed strength emerging in metals and oil refining stocks following a phase of correction. This shift presents specific opportunities for investors focusing on technically strong setups.

MRPL Shows Decisive Breakout Potential

Shetti highlighted MRPL as a preferred pick from the oil refining space. After a prolonged decline, MRPL has seen a strong rebound and is showing a decisive upside breakout.

SAIL Displays Bullish Flag Pattern

From the metals segment, Shetti remains bullish on Steel Authority of India, which has formed a bullish flag pattern after a consolidation phase.

Tata Steel Leads Metal Rally

On the broader metal pack, Shetti confirmed that momentum remains firmly positive, with Tata Steel and SAIL leading the rally. The recent upward move in Tata Steel marks a clear breakout from its consolidation zone, with the stock potentially moving towards ₹202.00–203.00 in the near term.

Insurance Sector Remains Under Pressure

Commenting on ICICI Lombard General Insurance, Shetti noted that the stock remains in a downtrend with no clear reversal signals yet. The ₹1,800.00 level could act as strong support, but investors should wait for base formation before taking fresh positions.

Investment Strategy and Risk Management

While broader sentiment remains cautious, technical indicators suggest that the Nifty may be forming a base near current levels. Select opportunities are emerging in metals and oil refining stocks, but Shetti advises investors to remain disciplined, focus on stock-specific setups, and use strict stop losses amid continued market volatility.