Week Ahead: Trump tariffs, INR-USD rate, FII outflow, global cues among key triggers for Indian stock market | Stock Market News

The Indian stock market resumed its corrective phase after snapping two weeks of recovery to extend its losing streak for eight straight sessions for the first time in two years. The sentiment remained negative from the very beginning, with a sell-on-rally sentiment amid several external triggers.

Next, investors will monitor some key market triggers in the third week of February. Donald Trump’s tariff announcements, Rupee-dollar rate, foreign fund outflow, domestic and global macroeconomic data, and global market cues will dictate the market direction in the next five days.

Domestic equity benchmarks Sensex and Nifty 50 slipped below their key psychological levels of 76,000 and 23,000, dragged by persistent foreign fund outflows amid US trade tariff concerns and weak quarterly earnings. The indices fell two per cent each to log the biggest weekly market slump in the past two months.

The 30-share BSE benchmark Sensex dropped 199.76 points, by 0.26 per cent to settle at 75,939.21. The NSE Nifty 50 index declined 102.15 points, or 0.44 per cent, to settle at 22,929.25 on Friday. The volatility index, India VIX, cooled off from 15.68, still settled slightly higher by 0.40 per cent at 15.02.

The Nifty 50 has fallen four per cent since February 5, 2025, and is 13 per cent below its record high from September 2024. On the weekly front, the Sensex plunged 1,920.98 points or 2.46 per cent, and the Nifty declined 630.7 points or 2.67 per cent, their worst in 2025 so far. 

Also Read: D-Street Ahead: How will the Indian stock market move next week? Key technical levels for Nifty, Sensex

In eight trading days to Friday, the BSE benchmark tumbled 2,644.6 points or 3.36 per cent, and the Nifty slumped 810 points or 3.41 per cent. The sharp plunge in broader indices, ranging from 7.4 per cent to 9.4 per cent, inflicted the maximum damage on market participants. 

The small-cap index is down 21.6 per cent from its record closing high on December 11, confirming bear territory. The mid-caps are 18.4 per cent below their peak closing on September 24. Investors’ wealth eroded by ₹25.31 lakh crore in eight days of the market crash. 

Experts say the Indian market has successfully navigated similar challenges in the past, from taper tantrums to geopolitical concerns. The current correction is driven by a combination of factors, including tapering, an earnings slowdown, elevated valuations, and trade uncertainties. 

Also Read: Buzzing Stocks: 48 BSE-listed stocks hit upper circuit to defy Sensex, Nifty’s biggest weekly loss in two months

“We believe the market is now in the final phase of consolidation. With the broad market having corrected by 14 per cent, the downside appears limited, supported by strong long-term economic fundamentals. This is an opportune time for long-term investors to remain patient and adopt an accumulation strategy,” said Vinod Nair, Head of Research at Geojit Financial Services.

This week, the primary market will witness a softer trend with a few initial public offerings (IPO) and important listings are slated across the mainboard and small and medium enterprises (SME) segments. The week will be critical from the domestic and technical point of view as investors will track domestic and global economic data, along with quarterly corporate earnings.

Here are the key triggers for stock markets in the coming week:

Trump tariffs

Investors are worried about the implications of US President Donald Trump’s plans to impose reciprocal tariffs, which analysts say could hurt India the most among its Asian peers. Donald Trump plans to impose reciprocal tariffs on every country taxing US imports. 

The imposition of these duties is likely to be delayed, helping global stocks stage a relief rally. D-Street analysts said the potential consequences of US tariffs on the Indian rupee and the US Federal Reserve interest rates could trigger higher foreign outflows from India, hurting domestic equities.
 

INR-USD exchange rate

The domestic unit has been facing extreme volatility for the past few months due to several global macroeconomic uncertainties. On Friday, the local unit extended its recovery and settled 12 paise higher at 86.81 against the US dollar amid easing American currency.

However, foreign institutional investors capped a sharp gain in the local unit with higher crude oil prices and incessant selling of domestic equities. The aggressive dollar chase was halted after the US government announced the implementation of reciprocal tariffs on April 1, giving its trading partners some relief.

“Rupee traded positive with gains of 0.10 ₹at 86.81, supported by the dollar sliding below 107$ and lower CPI numbers in India, which helped the rupee recover further after its sharp fall to 88.00,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

“Market participants will closely watch core retail sales and retail sales data from the US later in the evening, which could bring another round of volatility in the dollar index, keeping the rupee on edge. The range for the rupee is seen between 86.40-87.25 in the near term,” added Trivedi.

Also Read: IPO GMP: Ajax Engineering IPO, Hexaware Technologies IPO to Quality Power IPO — how much gain grey market signals?

2 new IPOs, 9 listings to hit D-Street

No new mainboard IPO is listed to open for subscription this week. However, Qaulity Power IPO will close for subscription on February 18. Two new SME IPOs will open for subscription this week. Further IPOs can open for bidding.

Among listings, shares of Hexaware Technologies Limited and Quality Power Electrical Equipments Limited will debut on stock exchanges BSE and NSE on February 19 and February 21, respectively. Shares of seven SMEs will get listed on either BSE SME or NSE SME this week.

FII Activity

Institutional activity data reflected net foreign institutional investors (FII) outflows of ₹19,004 crore in the cash segment, partially offset by strong domestic institutional investor (DII) inflows of ₹18,745 crore, providing some support to the market.

Despite many positive developments, like a good Budget, the RBI’s rate cut, and a slight improvement in Q3 results, the FIIs continued to press sales. The total FII selling this month through February 14 stood at ₹23,242 crore in the cash market. This takes the total FII cash market sales to ₹1,05,145 crore in 2025. 

“The allure of US assets has intensified, driven by rising bond yields that have made such investments more secure. This led FIIs to pivot away from Indian and other emerging market stocks. Investors are drawn to safer returns offered by US equities, leaving many markets, including India, in their shadow,” said Vipul Bhowar, Senior Director – Listed Investments, Waterfield Advisors.

Also Read: FPI selloff continues: Indian equities witness ₹85,300 crore outflows in 2025 so far; will this trend continue?

The ongoing weakness in the Indian Rupee heightened global uncertainties, and expensive equity valuations fuel the outflows. Since large-caps dominate the assets under the custody of FIIs, large caps have been facing the brunt of FII selling. 

Relentless selling at large caps has made their valuations attractive, opening opportunities for long-term investors. “The reversal of the FII strategy will happen when the dollar index moves down. This will happen, but we can’t predict when,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Global Cues

Last week, several factors contributed to the market downturn, with sentiment being particularly rattled by US President Donald Trump’s announcement of reciprocal tariffs on US trading partners. Speculation regarding US tariffs and their impact on global trade will remain a key factor to watch.

According to market experts, uncertainty surrounding Trump’s economic policies and high valuations may impact the stock market in the short term, especially in emerging markets. The US dollar’s exchange rate with other currencies will also be in check.

Corporate Action

Shares of Oil India, Gillette, Mrs. Bectors Food Specialities Ltd, Natco Pharma, among others, will trade ex-dividend in the coming week. A few stocks will also trade ex-split and ex-bonus this week. Check full list here

Technical View

Nifty 50 has crucial support at 22,800-22750; breaching below that may take it toward 22,500, and further downside could take it to 22,000. Read full technical analysis here

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.