Markets end flat with negative bias in volatile session over tariff worries

Indian equity benchmarks failed to protect their opening gains and ended flat with negative bias in a highly volatile session on Monday as investors remained cautious amid global uncertainties and sustained foreign fund outflows. Market participants remained on sidelines amid mixed set of macro-economic data. A cautious undertone prevailed in the lead up to Tuesday - which could see the United States slap Canada, Mexico and China with new tariffs on most imports.

Some of the important factors in today’s trade: 

Sustain foreign fund outflows: According to the provisional data available on the NSE, foreign institutional investors (FII) were the net sellers of shares net worth Rs 11,639.02 crore on Friday.

Fiscal deficit till January widens: Traders remained cautious as the central government's fiscal deficit up to January this financial year hit 74.5% of the revised annual target, compared with 63.6% a year before. 

India’s Manufacturing PMI slips to 56.3 in February: Traders were concerned as India's manufacturing activity grew at slow pace in the month of February. According to the survey report, the seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) eased to 56.3 in February as against 57.7 in January.

India’s economy grows 6.2% in Q3: Traders overlooked the government data showing that the Indian economy recovered in the December quarter to grow at 6.2 percent after sinking to a seven-quarter low of 5.6 percent in the July-September period.

On the global front: European markets were trading higher led by gains in defense shares, amid prospects of increased defense spending following European leaders echoing recent views of the U.K. about increasing spending for the sector. Asian markets ended mixed as Trump is expected to raise tariffs on China on Tuesday as scheduled.

Finally, the BSE Sensex fell 112.16 points or 0.15% to 73,085.94, and the CNX Nifty was down by 5.40 points or 0.02% to 22,119.30.

The BSE Sensex touched high and low of 73,649.72 and 72,784.54 respectively. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.25%, while Small cap index was down by 0.70%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.53%, Power up by 1.52%, Consumer Durables up by 1.24%, Realty up by 1.09% and Basic Materials up by 0.99%, while Energy down by 1.11%, Oil & Gas down by 0.50% and Bankex down by 0.28% were the few losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.21%, Bharti Airtel up by 1.76%, Infosys up by 1.19%, NTPC up by 1.14% and Mahindra & Mahindra up by 1.06%. On the flip side, Reliance Industries down by 2.38%, Bajaj Finserv down by 1.86%, HDFC Bank down by 1.72%, Adani Ports & SEZ down by 1.63% and Maruti Suzuki down by 1.48% were the top losers.

Meanwhile, indicating potential economic revival, gross goods and services tax (GST) collections rose by around 9.1 per cent to about Rs 1.84 trillion in February 2025, as compared to gross GST collection of Rs 1.68 trillion in February 2024, boosted by domestic consumption. However, the gross GST collections in February 2025 are lower than Rs 1.96 trillion collected in January 2025.

On a gross basis, mop up from Central GST stood at Rs 35,204 crore, State GST at Rs 43,704 crore, Integrated GST at Rs 90,870 crore and compensation cess of Rs 13,868 crore. GST revenues from domestic transactions jumped 10.2 per cent to Rs 1.42 trillion while that from imports grew 5.4 per cent to Rs 41,702 crore during February. Total refunds issued during February were Rs 20,889 crore, a 17.3 per cent increase over the year-ago period. 

Net GST collections during February 2025 grew around 8.1 per cent to about Rs 1.63 trillion. Net GST revenues in February 2024 were Rs 1.50 trillion. So far this fiscal (April-February), gross GST collections have grown 9.4 per cent to about Rs 20.13 trillion, while net GST collections rose 8.6 per cent to over Rs 17.79 trillion.

The CNX Nifty traded in a range of 22,261.55 and 22,004.70. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 4.52%, Grasim Industries up by 3.07%, Eicher Motors up by 2.79%, JSW Steel up by 2.67% and BPCL up by 2.15%. On the flip side, Coal India down by 2.44%, Reliance Industries down by 2.40%, Bajaj Auto down by 2.38%, Bajaj Finserv down by 1.80% and HDFC Bank down by 1.78% were the top losers.

European markets were trading higher; Germany’s DAX gained 231.28 points or 1.03% to 22,782.71, France’s CAC rose 47.37 points or 0.58% to 8,159.00 and UK’s FTSE 100 increased 37.91 points or 0.43% to 8,847.65.

Asian markets ended mixed on Monday as investors awaited clarity on U.S. President Donald Trump’s plans to impose tariffs this week on key trading partners. U.S. Commerce Secretary Howard Lutnick reportedly said that the exact tariff that will be levied against Mexico and Canada starting Tuesday is still ‘fluid’, which means it could be lower than the proposed 25%. He added that the additional 10% duty on China imports is ‘set’. However, some relief came as new PMI data suggested China's manufacturing had a solid start to 2025. China's February manufacturing purchasing managers' index (PMI) rebounded to 50.2, up from 49.1 in January. Also, Japan's manufacturing sector showed slight improvement in February, with PMI finalized at 49.0, up from 48.7 in January. Traders took note of reports that China is considering retaliatory measures on U.S. agriculture and food products if the U.S. insists on pursuing its own path on tariffs. Meanwhile, European leaders pledged to assemble a ‘coalition of the willing’ to develop a plan for ending Ukraine's war with Russia. South Korea was closed for Independence Movement Day Alternative Holiday.