The Indian stock market is likely to see a flat to marginally positive opening on Monday, January 12, 2026, influenced by mixed global signals. While major Asian indices traded higher, early trends from Gift Nifty suggested a neutral start for domestic benchmarks. Investor sentiment, however, remains cautious due to a combination of geopolitical tensions, ongoing trade uncertainties, and persistent foreign capital outflows.
Market Outlook and Analyst Views
Ponmudi R, CEO of Enrich Money, noted that while early global cues are mildly supportive and Asian markets have opened higher, Indian equities may continue to trade with caution. "GIFT Nifty indicates a neutral opening, while major Asian markets have opened higher, led by solid advances in Japan’s Nikkei and South Korea’s Kospi," he said. "Despite this positive regional setup, Indian markets may continue to trade cautiously, as ongoing trade and tariff-related uncertainties weigh on sentiment, prompting investors to remain selective."
This guarded stance follows a fifth straight session of losses on Friday, January 9. Both the Sensex and Nifty 50 closed in the red, dragged down by worries over potential US tariffs, a cautious mood ahead of the third-quarter earnings season, and sustained selling by foreign institutional investors.
Bajaj Broking highlighted that the Nifty fell below the 25,700 mark during that session. "Domestic markets remained in a risk-off mode amid persistent uncertainty over US–India tariff talks and escalating geopolitical tensions, especially concerns over potential US trade measures linked to Russia-related sanctions," the brokerage firm stated. Investors are also awaiting key Q3FY26 IT earnings results scheduled for release on Monday.
Friday's Market Performance and Key Levels
The sell-off on Friday was significant. The Sensex plunged 605 points, or 0.72%, to settle at 83,576.24. Similarly, the Nifty 50 dropped 194 points, or 0.75%, to end the day at 25,683.30. The pressure extended to broader markets as well, with the BSE Midcap index declining 0.90% and the Smallcap index witnessing a sharper fall of 1.74%.
Global Cues Shaping Monday's Trade
Asian Markets: Asian shares started the week on a positive note, taking cues from Wall Street's gains after a US jobs report showed weaker-than-expected job creation in December. Australia’s S&P/ASX 200 rose 0.71%, South Korea’s Kospi advanced 0.83%, and the Kosdaq gained 0.4%. Japanese markets were closed for a holiday. Hong Kong's Hang Seng Index also pointed to a higher open.
Gift Nifty: The Gift Nifty futures contract was trading at 25,809.50, about 7.50 points or 0.1% lower than the previous Nifty close, indicating a flat opening for the Indian market.
Wall Street: US markets ended at record highs on Friday. The S&P 500 rose 0.65% to 6,966.28, the Nasdaq Composite advanced 0.81% to 23,671.35, and the Dow Jones Industrial Average climbed 237.96 points, or 0.48%, to close at 49,504.07.
Geopolitical and Commodity Factors
US-Iran Conflict: Geopolitical risks escalated as former US President Donald Trump considered measures against Iran following its crackdown on protesters. Iran retaliated with a warning on Sunday, stating that US and Israeli military bases in the region could be seen as "legitimate targets" if any military action is taken.
Crude Oil Prices: Oil prices held steady on Monday. Brent crude futures edged down 5 cents to $63.29 per barrel, while US West Texas Intermediate slipped 6 cents to $59.06. The market balanced the risk of supply disruptions from Iran against moves to restart Venezuelan oil exports.
Gold and Silver: Gold prices soared to an all-time high near $4,600 an ounce, driven by geopolitical tensions and news of a US Justice Department probe into the Federal Reserve. Silver also rallied sharply, gaining 4.6% on Monday.
US Dollar: The US dollar index fell 0.3% to 98.899, easing from a one-month high, following the news of the criminal investigation into Fed Chair Jerome Powell.
In summary, while positive Asian markets may offer some support, Indian investors are navigating a complex landscape filled with geopolitical headlines, trade concerns, and key domestic earnings, likely leading to a volatile and selective trading session on Monday.
