Indian equities closed lower on January 9 2025 as investors pared risk amid global uncertainty, renewed concern over trade frictions with the US and caution ahead of key inflation data due in the week starting January 12.

The Indian markets also severely corrected based on the potential implications of comments by US President Donald Trump and a proposed US bill that would impose a 500% tariff on Indian goods over New Delhi’s purchases of Russian oil, developments that added to geopolitical and policy risk premiums.

The Trump administration’s intermittent signals and statements about intervention on the side of the protestors in Iran where widespread protests against the ruling islamic regime are reaching a critical point, as well as the US’s continued insistence on acquiring Greenland from Denmark for its own national security needs contributed to the crashing sentiment.

According to a report by state owned DD News, the BSE Sensex fell 604.72 points, or 0.72%, to close at 83,576.24, while the NSE Nifty 50 declined 193.55 points, or 0.75%, to 25,683.30. Losses accelerated as the session progressed after a flat opening, reflecting late-day selling by institutional investors. Sectoral performance showed broad-based weakness.

Real estate and automobile stocks led declines, with the Nifty Realty index down 2.26% and the Nifty Auto index lower by 1.15%. Consumer-linked segments also underperformed, as the Nifty Consumer Durables slipped 1.14%, the Nifty FMCG index fell 1.08% and the Nifty Consumption index dropped 1.06%, signalling caution on discretionary demand. A handful of sectors bucked the trend.

The Nifty Oil & Gas index rose 0.40%, supported by selective buying in energy names, while the Nifty IT index added 0.28% on expectations of stable overseas demand. Public sector lenders also saw modest gains, with the Nifty PSU Bank index up 0.18%.

Heavyweights dragged the benchmark indices lower. Shares of NTPC Ltd (NSE:NTPC), ICICI Bank Ltd (NSE:ICICIBANK), Bharti Airtel Ltd (NSE:BHARTIARTL), Sun Pharmaceutical Industries Ltd (NSE:SUNPHARMA), InterGlobe Aviation Ltd (NSE:INDIGO), Mahindra & Mahindra Ltd (NSE:M&M), Bajaj Finance Ltd (NSE:BAJFINANCE), Titan Co Ltd (NSE:TITAN), Axis Bank Ltd (NSE:AXISBANK), ITC Ltd (NSE:ITC), Tata Steel Ltd (NSE:TATASTEEL), Maruti Suzuki India Ltd (NSE:MARUTI), UltraTech Cement Ltd (NSE:ULTRACEMCO), HDFC Bank Ltd (NSE:HDFCBANK), Bajaj Finserv Ltd (NSE:BAJAJFINSV), Hindustan Unilever Ltd (NSE:HINDUNILVR) and Power Grid Corp of India Ltd (NSE:POWERGRID) were among the main laggards.

Gains were limited to select counters. Asian Paints Ltd (NSE:ASIANPAINT), HCL Technologies Ltd (NSE:HCLTECH), Bharat Electronics Ltd (NSE:BEL), Eternal Ltd (NSE:ETERNAL), Tech Mahindra Ltd (NSE:TECHM), State Bank of India (NSE:SBIN), Tata Consultancy Services Ltd (NSE:TCS) and Infosys Ltd (NSE:INFY) ended higher. Broader markets also weakened.

The Nifty Midcap 100 index fell 474.40 points, or 0.79%, to 59,748.15, while the Nifty Smallcap 100 index slid 318.40 points, or 1.81%, to 17,282.65, indicating risk aversion beyond frontline stocks.

Profit taking intensified amid global volatility and uncertainty over trade negotiations after the US Commerce Secretary signalled delays in an India-US trade deal. Trump’s recent statements on trade and the proposed punitive tariff bill targeting India’s Russian oil imports further clouded the outlook. 

Attention is now also on India’s own inflation data due on January 12, which investors see as critical for assessing the policy stance of India’s central bank, the Reserve Bank of India, and the near-term direction of equities.