Indian equity benchmarks Sensex and Nifty staged a modest recovery on Friday, January 9, 2026, snapping a four-day losing streak driven by concerns over U.S. tariffs. The BSE Sensex climbed about 192 points to 84,373 in early trade, while the Nifty rose 45 points to 25,922, buoyed by defense sector gains like Bharat Electronics up over 2% on Trump's proposed $1.5 trillion military budget. This rebound followed Thursday's sharp fall, with Sensex dropping 780 points to 84,181 and Nifty sliding 264 points to 25,877 amid tariff fears.
Supreme Court Tariff Ruling
Markets awaited a potential U.S. Supreme Court decision on the legality of President Trump's tariffs imposed under the International Emergency Economic Powers Act (IEEPA), with a ruling possible as early as January 9. Lower courts ruled the tariffs illegal in 2025, but they stayed in effect; a negative verdict could trigger up to $150 billion in refunds for importers, including those from India hit by 50% duties. Justices appeared skeptical during November arguments, potentially reshaping trade policy and boosting affected emerging markets if struck down.
Institutional Flows
Foreign portfolio investors (FIIs) net sold Rs 3,367 crore on January 8, continuing outflows, while domestic institutional investors (DIIs) countered with Rs 3,701 crore in net buying, providing key support. This divergence highlights DIIs cushioning FII selling amid global volatility, with net institutional flows positive due to domestic liquidity. Such patterns reinforce India's structural growth appeal for long-term investors.
Regional Markets
Asian markets traded mixed: Japan's Nikkei rose 1.03% to 51,644, Hong Kong's Hang Seng up 0.21% to 26,204, South Korea's Kospi gained 0.28% to 4,565, while China's CSI 300 climbed 0.53%. Defense and aerospace stocks surged regionally, mirroring India's gains amid U.S. budget news. These cues supported a cautious positive open for Indian indices despite U.S. uncertainties.
Outlook and Recommendations
Analysts advise accumulating financials, consumer discretionary, and industrials on dips, with Nifty support at 25,840 and resistance at 26,000. Volatility persists ahead of U.S. jobs data and tariff verdict; focus on stock-specific opportunities in resilient sectors. DII strength suggests limited downside, favoring range-bound trading.
