The excitement surrounding the ceasefire and the US-China trade truce appears to be settling. With the initial euphoria fading, markets are gradually shifting back to reality. A phase of profit-booking could follow, and early signs suggest a softer start to the day with a possible move towards consolidation.
While the US-China trade agreement brings relief, it’s a double-edged sword for India. On the one hand, it might end the threat of Chinese exporters dumping surplus goods in countries like India, which is certainly positive. On the other hand, if US capital begins flowing back into China, it could dampen India’s ambitions of becoming the world’s "second factory"—a narrative that had gained traction during the trade war.
India has approached the World Trade Organization (WTO) seeking permission to impose retaliatory tariffs in response to the duties the US had levied on steel and aluminium. Washington's response to this development is still awaited.
As trade tensions ease globally, recession fears are also retreating, prompting a rise in crude oil prices.
The derivatives market reflected cautious sentiment. GIFT Nifty closed at 24,952 on Monday night and opened slightly higher at 24,959 on Tuesday morning before slipping to 24,912. A mild recovery followed, but early signs suggest Indian markets could start the day on a weaker note.
European markets closed on a high yesterday, with Germany's DAX rewriting its record. Meanwhile, the US-China truce sent American indices soaring. On Monday, the Dow Jones surged 1,160.72 points (2.81%) to close at 42,410.10, while the S&P 500 jumped 184.25 points (3.26%) to end at 5,844.19. The tech-heavy Nasdaq rose by 779.43 points (4.35%) to 18,708.30.
However, US futures opened in the red this morning. Dow, S&P 500, and Nasdaq futures were down 0.20%, 0.26%, and 0.34%, respectively. Asian indices, including Japan’s Nikkei, were trading higher, with the Nikkei up by 2.2% in early trade. Hong Kong and Shanghai also witnessed gains.
The easing of border tensions and a potential resolution to the US-China trade war helped Indian markets stage their sharpest single-day rally in four years. However, US President Joe Biden’s announcement to slash medicine prices by 30–80% raised concerns over pharma companies’ profitability, triggering a sell-off in stocks like Sun Pharma, Glenmark, Cipla, and Aurobindo. The pharma index, which had started the day in the red, closed with only marginal gains.
The Midcap 100 and Smallcap 100 indices each ended over 4% higher. The IT sector was the standout performer, soaring 6.7%. Oracle Financial climbed 8.90%, Infosys rose 7.69%, Coforge added 7.37%, and Persistent Systems jumped 7.31%.
On Monday, Nifty soared by 916.70 points (3.82%) to close at 24,924.70, while Sensex surged 2,975.43 points (3.74%) to end at 82,429.90. Bank Nifty closed 1,787.60 points higher (3.34%) at 55,382.85. The Midcap 100 index gained 2,192.70 points (4.12%) to 55,416.05, while the Smallcap 100 index rose by 681.65 points (4.24%) to 16,767.30.
Market breadth was clearly in favour of the bulls. On the BSE, 3,541 stocks advanced against just 582 that declined. On the NSE, 2,614 stocks closed in the green while only 329 fell. Notably, 47 stocks hit 52-week highs, whereas 24 touched lows. As many as 322 stocks hit the upper circuit, with just 35 reaching the lower circuit.
Total market capitalisation on the BSE rose by ₹16 lakh crore on Monday, reaching ₹432.56 trillion (₹43.26 lakh crore), equivalent to approximately $5.05 trillion.
Foreign institutional investors (FIIs) bought equities worth ₹1,246.48 crore in the cash market, while domestic institutional investors (DIIs) made purchases worth ₹1,448.37 crore.
If the rally continues, Nifty may target 25,200. However, profit-booking could trigger selling pressure. Immediate support for Nifty lies at 24,530 and 24,400, with resistance expected at 24,970 and 25,100.
Gold prices fell sharply following the US-China agreement. With reduced need for safe-haven assets and a strengthening US dollar, gold’s appeal has waned. Analysts at JP Morgan project gold could touch $4,000 per ounce by mid-2026 and reach $6,000 by 2029. Their year-end forecast for 2025 stands at $3,675. The precious metal has already gained 20% this year, with potential for a further 20% rise, they noted. However, this outlook was issued just before the latest trade truce.
On Monday, gold dropped $41.30 to settle at $3,238.70 per ounce, slipping further to $3,226 in early trade today. In Kerala, the price declined by ₹2,360 per sovereign to ₹70,000—a substantial drop in just one day. Local prices may fluctuate today depending on rupee-dollar exchange movements.
Silver traded at $32.54 per ounce
Among industrial metals, copper prices rose 1.10% to $9,590 per tonne. Aluminium surged 2.75% to $2,472.49. Tin increased by 2.70%, lead by 0.38%, zinc by 2.48%, and nickel by 1.47%.
In global commodities, cocoa prices gained 1.39% to $9,311.92, while coffee slipped 3.33%. Palm oil rose by 1.10%.
The US Dollar Index surged on Monday, opening at 100.34 and climbing to 101.98 before closing at 101.79—a gain of 1.44%. It eased slightly to 101.65 this morning.
The euro dipped to $1.110, while the pound fell to $1.318. The Japanese yen weakened to 147.86 per dollar. US bond yields rose, with 10-year Treasury yields touching 4.47%, before easing slightly. Markets took comfort in the fading threat of a global recession.
After a one-day break, the forex market reopens today with expectations of a stronger rupee, thanks to easing border tensions. The dollar, however, continues to hold firm. The Chinese yuan strengthened to 7.20 per dollar.
Crude oil markets rallied on hopes of global trade stability. Brent crude climbed over 1% to $64.99 per barrel on Monday, while WTI rose to $61.98. This morning, Brent is trading at $64.85, WTI at $61.86, and Murban crude at $65.22.
After recent sharp gains, cryptocurrencies experienced mild corrections due to profit-taking. Bitcoin is trading above $102,800, while Ethereum has slipped below the $2,500 mark