‘Optimism has evaporated...’: Alok Jain reads market sentiment amid US tariff jitters
The Nifty 50 fell 2.65%, marking six consecutive down sessions and slipping below both the 20-day and 100-day moving averages. The index is now near the 24,300–24,400 support zone.
- Sep 27, 2025,
- Updated Sep 27, 2025 4:34 PM IST
It was a difficult week for Indian equities as concerns over potential US tariffs on Indian pharma and IT sectors, combined with sustained foreign investor selling, dragged indices lower. According to Alok Jain, Founder of Weekend Investing, the developments created “negative headwinds” for the market.
The Nifty 50 fell 2.65%, marking six consecutive down sessions and slipping below both the 20-day and 100-day moving averages. The index is now near the 24,300–24,400 support zone. Jain said, “Optimism from early September has evaporated. Instead of making fresh highs, markets are struggling to hold key support levels.”
Broader markets underperformed. Midcaps were down 4.2%, small caps declined 4.7%, and nearly 40% of smaller stocks are now more than 40% below their 52-week highs. “The only place to hide right now is the Nifty,” Jain observed.
Sectoral impact
The week was especially harsh for IT stocks, which fell 7.9%. Over the past three months, the IT index has dropped 13%, and over the past year it is down 20%. Jain noted that the support from Infosys’ buyback has faded, and the sector continues to underperform. Pharma also declined on tariff fears, though the US later clarified that tariffs would not apply to countries with trade pacts, potentially sparing India.
Other big losers were real estate (-6.1%), capital markets, tourism, and defense. Metals, PSU banks, and financial services limited losses to around 1–2%.
Global cues
Global markets also struggled. The S&P 500 fell 0.31%, the Russell 2000 dropped 6%, and the Hang Seng lost 1.6%. In dollar terms, the Nifty was down 3.2%, underperforming peers.
Gold extended its winning streak, rising 2.7% for the week. Jain pointed out: “In weeks where Nifty doesn’t do well, gold in INR does well. So it’s a very good counterbalance for Indian equity.”
Persistent FII selling
Foreign Institutional Investors sold aggressively through all five sessions, offloading between Rs 2,400 crore and Rs 5,600 crore daily. For the month, FII sales stood at Rs 51,000 crore, while Domestic Institutional Investors bought around Rs 84,000 crore. Jain remarked, “The market would have sunk far deeper without DII inflows.”
Despite the correction, India’s three-year and five-year returns remain robust. Small caps have gained nearly 28% over three years, while Nifty returns are significantly above long-term averages. Jain explained, “We went too far, too fast in the last two years, and now the market is taking time to digest.”
IT and pharma bore the brunt of tariff worries, while mid- and small-cap stocks continued to weaken sharply. Jain noted that the market is “trying to break the back of the last standing bulls” as it retests support levels. With FIIs selling and valuations elevated, the near-term outlook remains cautious until earnings catch up.
It was a difficult week for Indian equities as concerns over potential US tariffs on Indian pharma and IT sectors, combined with sustained foreign investor selling, dragged indices lower. According to Alok Jain, Founder of Weekend Investing, the developments created “negative headwinds” for the market.
The Nifty 50 fell 2.65%, marking six consecutive down sessions and slipping below both the 20-day and 100-day moving averages. The index is now near the 24,300–24,400 support zone. Jain said, “Optimism from early September has evaporated. Instead of making fresh highs, markets are struggling to hold key support levels.”
Broader markets underperformed. Midcaps were down 4.2%, small caps declined 4.7%, and nearly 40% of smaller stocks are now more than 40% below their 52-week highs. “The only place to hide right now is the Nifty,” Jain observed.
Sectoral impact
The week was especially harsh for IT stocks, which fell 7.9%. Over the past three months, the IT index has dropped 13%, and over the past year it is down 20%. Jain noted that the support from Infosys’ buyback has faded, and the sector continues to underperform. Pharma also declined on tariff fears, though the US later clarified that tariffs would not apply to countries with trade pacts, potentially sparing India.
Other big losers were real estate (-6.1%), capital markets, tourism, and defense. Metals, PSU banks, and financial services limited losses to around 1–2%.
Global cues
Global markets also struggled. The S&P 500 fell 0.31%, the Russell 2000 dropped 6%, and the Hang Seng lost 1.6%. In dollar terms, the Nifty was down 3.2%, underperforming peers.
Gold extended its winning streak, rising 2.7% for the week. Jain pointed out: “In weeks where Nifty doesn’t do well, gold in INR does well. So it’s a very good counterbalance for Indian equity.”
Persistent FII selling
Foreign Institutional Investors sold aggressively through all five sessions, offloading between Rs 2,400 crore and Rs 5,600 crore daily. For the month, FII sales stood at Rs 51,000 crore, while Domestic Institutional Investors bought around Rs 84,000 crore. Jain remarked, “The market would have sunk far deeper without DII inflows.”
Despite the correction, India’s three-year and five-year returns remain robust. Small caps have gained nearly 28% over three years, while Nifty returns are significantly above long-term averages. Jain explained, “We went too far, too fast in the last two years, and now the market is taking time to digest.”
IT and pharma bore the brunt of tariff worries, while mid- and small-cap stocks continued to weaken sharply. Jain noted that the market is “trying to break the back of the last standing bulls” as it retests support levels. With FIIs selling and valuations elevated, the near-term outlook remains cautious until earnings catch up.