Indian equity markets concluded their worst week since September as benchmark indices fell for the fifth consecutive session, weighed down by concerns over potential US tariffs and sustained foreign selling pressure.

Market Performance Overview

The week's trading session saw significant declines across major indices, with both the Nifty and Sensex retreating from their recent all-time highs achieved on Monday.

Foreign Investment Outflows Continue

Foreign portfolio investors maintained their selling momentum, offloading Indian equities worth ₹3,769 crore on Friday. This selling pressure has been partially offset by domestic institutional buying of ₹5,596 crore during the same session.

Rohit Srivastava, founder of Indiacharts.com, noted that foreign investors remained short on index futures despite the previous week's recovery, indicating their continued bearish stance on Indian markets.

Tariff Concerns Weigh on Sentiment

The market decline follows concerns over potential punitive tariffs on imports from countries purchasing Russian oil, including India and China. These tariff threats have dampened expectations of an imminent India-US trade deal, which market participants had viewed as crucial for a rebound in Indian risk assets.

"While he may or may not impose the tariffs, it implies that India doesn't have a deal with the US yet, which is bound to have economic impact," said Srivastava. "When the 50% tariffs were imposed, Indian traders already had festive orders, but now the manufacturing sector could feel the heat of the existing tariffs as the festive season is behind us."

Technical Analysis and Market Outlook

Technical indicators suggest oversold market conditions, though analysts warn that any recovery could be short-lived. Vipin Kumar, AVP Equity Research at Globe Capital Market, identified key technical levels for market direction.

"Nifty witnessed a Double Top formation breakdown, which is typically negative and indicates a 'sell on rise' market till it crosses above 26,000 levels, which seems unlikely in the near term," Kumar explained.

Regional Market Performance and Key Indicators

While Indian markets declined, other Asian markets showed mixed performance. Japan gained 1.6%, China and South Korea rose 0.9% and 0.8% respectively, and Hong Kong advanced 0.3%. Taiwan ended 0.2% lower.

Market volatility increased, with the VIX climbing 3.1% to 10.9, while Brent crude futures rose 0.9% to $62.4 per barrel. Market participants are awaiting the US Supreme Court's expected verdict, which will determine the authority to impose tariffs without Congressional approval.

Wall Street indexes opened with mixed performance on Friday as investors digested weaker-than-expected employment data that highlighted ongoing challenges in the U.S. labor market. The disappointing jobs report, combined with anticipation surrounding a potential Supreme Court ruling on tariffs, created a cautious trading environment at the start of the session.

December Jobs Data Falls Short of Expectations

The Labor Department's latest employment report revealed significant weakness in job creation for December. The following table summarizes the key employment metrics:

The modest job creation figure of 50,000 positions represents a concerning slowdown in employment growth, suggesting potential softening in the labor market. However, the unemployment rate of 4.4% provided some relief to investors, coming in marginally below analyst expectations and indicating continued labor market resilience.

Market Response at Opening Bell

The mixed economic signals translated into varied performance across major indexes at the market open. The following table shows the opening movements:

The divergent performance reflected investor uncertainty, with the Dow posting a slight decline while both the S&P 500 and Nasdaq managed modest gains. This mixed response suggests markets were weighing the negative implications of weak job creation against the relatively stable unemployment rate.

Additional Market Considerations

Beyond the employment data, investors remained focused on potential policy developments, particularly awaiting a Supreme Court ruling on tariffs. This anticipation added another layer of uncertainty to market sentiment, as traders positioned themselves for potential policy implications that could affect various sectors and overall market direction.

The combination of disappointing jobs data and pending policy decisions created a cautious atmosphere, with investors likely to monitor upcoming economic indicators and policy announcements for clearer directional signals in the sessions ahead.