Indian equity markets opened on a tepid note on Tuesday morning, failing to sustain initial gains as profit booking at higher levels pulled benchmark indices into negative territory. The session witnessed divergent sectoral performance amid cautious sentiment driven by renewed tariff-related concerns and rising geopolitical tensions.

Market Performance Overview

The benchmark indices showed mixed opening trends before declining through the morning session. Key market movements by 10:00 am included:

Ponmudi R, CEO of Enrich Money, noted that "Indian equity markets are set to open on a steady to mildly positive note on Tuesday, extending yesterday's sharp rebound from intraday lows. However, the broader undertone stays cautious as volatility has picked up amid renewed tariff-related concerns and rising geopolitical tensions in the Middle East."

Sectoral Performance and Stock Movements

The morning session witnessed divergent sectoral performance, with metal stocks leading the gainers while information technology counters faced selling pressure following mixed quarterly results from sector heavyweights.

Top Gainers

Top Decliners

Technical Analysis and Market Outlook

Technical analysts suggested the market remains in a consolidation phase despite Monday's sharp recovery. Ponmudi R explained that "The Nifty 50 staged a measured recovery with a gap-up opening after the recent corrective phase, but failed to sustain momentum as profit booking at higher levels pulled the index back into the red. The 50-day EMA at around 25,895 now acts as an immediate intraday resistance, and a sustained reclaim of this level will be critical to restore upside momentum."

Shrikant Chouhan, Head Equity Research at Kotak Securities, outlined key technical levels:

Chouhan noted that "below 25,600/83,300, sentiment could change."

Global Influences and Commodity Markets

Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted ongoing global factors: "Geopolitical developments and President Trump's comments and actions will continue to influence markets. Trump's weaponisation of tariffs have already impacted global trade and particularly countries which have been targeted with penal tariffs."

Devarsh Vakil, Head of Prime Research at HDFC Securities, noted positive global cues: "The S&P 500 and Dow registered record closing highs on Monday as technology stocks and Walmart gained, with investors largely dismissing concerns about the Justice Department's criminal investigation of Federal Reserve Chair Jerome Powell. The Nifty 50 broke its five-day losing streak, climbing 106 points to close at 25,790."

Commodity markets witnessed significant action, with Rahul Kalantri, VP Commodities at Mehta Equities Ltd, observing: "Gold and silver surged sharply on Monday as uncertainty over the Federal Reserve's outlook combined with rising geopolitical tensions in Iran." He added that crude oil prices remained volatile with support at $58.70-57.80 and resistance at $60.20-60.90.

Market participants remained focused on December-quarter earnings, particularly from the IT sector, which could drive stock-specific action through the session. Dr Vijayakumar pointed to expectations that trade negotiations would resume on January 13, noting "the necessity of a US-India trade agreement was evident yesterday when the market bounced back sharply."

Indian equity markets experienced a reversal of fortune on Tuesday, with benchmark indices slipping into negative territory despite opening on a positive note. The early optimism surrounding U.S. trade developments was quickly overshadowed by weakness in FMCG and IT stocks, leading to broad-based selling pressure.

Market Performance Overview

By 9:30 a.m., the market sentiment had shifted dramatically from the opening bell. The benchmark indices reflected this change in investor mood:

The decline marked a sharp contrast to the previous session's performance, where both the Sensex and Nifty had gained roughly 0.4% on trade negotiation optimism.

Sectoral and Stock Performance

Despite the overall market decline, certain stocks managed to buck the trend. On the 30-stock Sensex, several companies posted gains:

These stocks advanced between 0.4% and 3.00%, providing some support to the broader market. The IT sector showed resilience with the index rising 0.6%. Tata Consultancy Services edged up 0.2% while HCL Technologies climbed 1.00% after both companies reported modest revenue beats for the December quarter.

The market breadth remained relatively positive, with small-cap and mid-cap indices each adding about 0.4%, indicating that the selling pressure was primarily concentrated in large-cap stocks.

Expert Market Analysis

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, emphasized the ongoing influence of geopolitical developments on market sentiment. He highlighted President Trump's tariff policies as a key factor, noting that "Trump's weaponisation of tariffs has already impacted global trade and particularly countries which have been targeted with penal tariffs."

Vijayakumar pointed to Trump's latest declaration about imposing 25% tariffs on countries trading with Iran as evidence of continued policy uncertainty. He described the current U.S. administration's approach as "unprecedented, unstable, unpredictable behaviour" that will continue to weigh on markets.

The expert also noted the importance of U.S.-India trade relations, referencing the previous day's market bounce when U.S. ambassador Sergio Gor declared that talks would resume as early as January 13th. Looking ahead, Vijayakumar indicated that Q3 results would drive stock-specific action in the near term.

Currency and Commodity Impact

The Indian rupee faced pressure in early trading, slipping 5 paise to 90.22 against the U.S. dollar. This decline was attributed to multiple factors:

• Firmer greenback strength
• Rising crude oil prices
• Continued foreign fund outflows

The dollar index gained 0.11% to 98.73, reflecting broader U.S. currency strength. Oil prices also contributed to market concerns, with Brent crude futures rising 28 cents or 0.4% to $64.15 per barrel, trading near a two-month high due to renewed anxiety over Iran and supply disruption risks.

Market Outlook

The current market environment reflects a complex interplay of domestic and international factors. While trade negotiation prospects with the U.S. provide some optimism, ongoing geopolitical uncertainties and sectoral weakness continue to create volatility. Investors remain focused on upcoming quarterly results and policy developments that could influence market direction in the coming sessions.