India Equity Benchmarks Slip as Foreign Outflows Rise and U.S.-India Trade Deal Remains Uncertain

India equity benchmarks opened the week under pressure as global and domestic concerns weighed on market sentiment. Early trade on Monday saw selling across sectors, driven by continued foreign outflows and lingering uncertainty around a U.S.-India trade deal.

Currency weakness added to the nervous mood, with the rupee slipping to a record low, further unsettling investors.

Market Performance: Nifty 50 and Sensex Open Lower

Both frontline indices started the session in the red, reflecting broad-based selling pressure.

• Nifty 50: Down 0.51% at 25,913.45
• Sensex: Fell 0.46% to 84,875.85
• Time of data: 9:30 a.m. IST

The weakness was not limited to large caps. Broader markets also struggled to gain traction in early trade.

• Mid-cap index: Down 0.5%
• Small-cap index: Down 0.2%

All 16 major sectoral indices were trading lower, pointing to a widespread risk-off tone.

Main News: Foreign Outflows and Trade Deal Uncertainty Weigh on Sentiment

The key drag on India's equity benchmarks remained persistent foreign selling. Provisional data showed overseas investors continued to trim exposure, marking another session of net outflows.

• Foreign selling on Friday: ₹11.1 billion
• December outflows so far: $2 billion
• Selling streak: Sixth consecutive session

At the same time, uncertainty around the U.S.-India trade deal continued to cloud sentiment. With no immediate clarity on progress, concerns around exports and the trade balance stayed in focus.

Rupee Hits Record Low, Adds to Market Pressure

Currency markets reflected the stress seen in equities. The rupee weakened to a record low of 90.56 per dollar, extending its recent slide.

The softer rupee added another layer of caution, especially as foreign investors remained net sellers and global risk appetite stayed fragile.

Sector Watch: Financial Stocks Drag the Indices

Among sectoral movers, financial stocks emerged as the biggest laggards during early trade.

• Financials on Nifty: Down 0.5%

Given higher foreign ownership in financial stocks, the sector bore the brunt of overseas selling pressure, contributing significantly to the fall in the Nifty 50.

Stock-Specific Moves Reflect Mixed Cues

Individual stocks showed divergent moves amid the broader weakness.

• Oil and Natural Gas Corp: Down 3%, among the top losers on the Nifty
• KEC International: Gained 3.5% after announcing new orders worth ₹11.5 billion

These stock-specific moves stood out but did little to lift the overall market mood.

Summary: Markets Stay Cautious as Key Risks Persist

India equity benchmarks opened lower as foreign outflows, trade deal uncertainty, and a record-low rupee combined to pressure sentiment. The Nifty 50 and Sensex both slipped in early trade, with selling spread across sectors and market capitalisations.

With overseas investors continuing to reduce exposure and global cues remaining uncertain, the market began the week on a cautious note, reflecting the challenges currently facing Indian equities.