A decisive week begins today for Indian markets, with several major developments lined up that could shape the near-term trend.
The most significant phase in the US trade war begins Thursday, when the new tariffs—including a 25 percent duty on Indian goods—come into force. Ahead of that, the Reserve Bank of India (RBI) will announce its interest rate decision on Wednesday. Quarterly earnings from major Indian companies are also expected this week—three critical triggers that investors are watching closely.
Most economists believe the RBI will hold the repo rate steady. Few expect a rate cut to help in the backdrop of escalating U.S. tariff action. Likewise, there is little hope that Donald Trump will offer India any concessions. The higher duties are expected to hit Indian exports hard—everything from seafood and garments to electronics, pharmaceuticals, and gems may take a hit.
Quarterly results so far have been underwhelming. Among 976 companies that have reported so far, revenue growth has slowed to 7.1 percent from 9.7 percent a year earlier. Net profit growth has dropped from 17.3 percent to 5.3 percent.
Meanwhile, OPEC and its allies (OPEC+) have decided to raise crude output by 5,86,000 barrels per day in September, pushing oil prices lower. Trump’s announcement about deploying nuclear submarines near Russian waters has not had a visible impact on markets.
On Friday night, Gift Nifty closed at 24,670.00. It opened at 24,656 this morning and touched 24,694 before retreating. Signals point to a modestly positive start for Indian equities today, with the market expected to project resilience in the face of tariff threats.
European markets tumbled sharply on Friday, rattled by trade war concerns. A 39 percent tariff on Switzerland stunned its export sector. Sales of Swiss luxury items like watches are expected to decline. It was the worst trading day since April. Trump’s demand that pharma companies cut drug prices also hurt markets, sending pharma stocks down as much as 4 percent.
U.S. markets were hit by a double whammy on Friday: tariffs came in higher and harsher than expected, while jobs data delivered a nasty surprise. The Dow Jones Industrial Average plunged 790 points intraday before recovering part of the losses to close 542.40 points (1.23 percent) lower at 43,588.58. The S&P 500 shed 101.38 points (1.60 percent) to end at 6,238.01, and the Nasdaq Composite dropped 472.32 points (2.24 percent) to close at 20,650.13.
Amazon shares fell 8.27 percent after issuing a downbeat earnings outlook. Tech giants including Apple, Nvidia, and Microsoft also slid sharply.
In futures trading, the Dow rose 0.17 percent, the S&P 500 climbed 0.21 percent, and the Nasdaq gained 0.25 percent in early Monday action.
Asian markets opened lower. Japan fell 2 percent, Australia dropped 0.30 percent, while South Korea rose 1 percent. Hong Kong remained weak.
There was no recovery on Friday from the disappointment over Thursday’s tariff announcement. The Sensex ended just 100 points higher and the Nifty by only 27 points from intraday lows. All major sectors ended in the red except FMCG. Pharma and healthcare stocks led the decline, followed by metal, realty, IT, auto, and oil & gas.
Foreign investors were net sellers to the tune of ₹3,366.40 crore on Friday. Domestic funds bought shares worth ₹3,186.86 crore.
Over the past week, the Sensex declined 1.06 percent, Nifty by 1.09 percent, and Bank Nifty by 1.61 percent. The Midcap index fell 1.92 percent, and Smallcap index by 2.97 percent. Realty tumbled 5.6 percent, while FMCG rose 2.41 percent. This was the fourth straight weekly decline for Indian equities.
The Nifty’s support level has shifted lower. If it falls below 24,500, it could test 24,200–24,000. Key support for today is at 24,525 and 24,475, with resistance at 24,725 and 24,785.
The Trump tariff salvo was unexpected, and markets are now grappling with the reality that India’s government has no clear strategy to counter the hostile moves. Close ties between Prime Minister Narendra Modi and Trump, India’s strategic importance, and the size of its market seem to have had no bearing on the US decision. Making matters worse, the US has struck an oil exploration deal with Pakistan and lowered tariffs for Islamabad to 19 percent. India finds itself unable to even voice strong protest.
India appears to be reverting to the old rhetoric of self-reliance and “Swadeshi.” The government says it will continue to buy oil from Russia, although imports have already declined. Avoiding Russian oil could add at least $10 billion in annual import costs.
The issue is not oil alone—Washington is also uncomfortable with India’s defence ties with Moscow and its arms imports from Russia. But New Delhi insists those cannot be abandoned overnight.
National Security adviser Ajit Doval and External Affairs Minister S. Jaishankar will visit Russia this month—likely a symbolic protest against US-Pakistan cosiness. So far, there has been no announcement of high-level talks with the US. India has not responded to Trump’s provocations, including jibes about a “dead economy like Russia’s” and threats of 500 percent tariffs. With Trump’s embrace of Pakistan now out in the open, India’s hope that he would soften his stance has faded. The diplomatic fallout is being quietly absorbed.
If strains in India–U. ties persist, markets could be seriously affected, especially if American investment institutions begin to pull out. Meanwhile, signs of weakness in the US economy are also a cause for concern.
The U.S. jobs report released Friday fell short of expectations and undermined Trump’s narrative. Only 73,000 jobs were created in July, compared to a forecast of 115,000. May and June data were also sharply revised downward—from 144,000 to 19,000 in May and from 147,000 to 14,000 in June. Unemployment rose from 4.1 percent to 4.2 percent.
Claims that the trade war hasn’t hurt the U.S. economy now ring hollow. Trump even fired the head of the Bureau of Labor Statistics, reportedly over the data.
Earlier, GDP figures showed little cause for cheer. The three percent second-quarter growth came entirely from a fall in imports. First-quarter GDP had declined by 0.5 percent due to a surge in imports. Stripping out these distortions, growth remains below one percent. Even with them included, first-half growth is just 1.2 percent—only half the 2024 pace.
Some market participants expect these figures to prompt the U.S. Federal Reserve to cut rates in September. But rising inflation remains a concern. With tariffs set to kick in Thursday, price pressures could worsen. Two more inflation prints are due before the Fed meeting and may influence its decision. Overall, the U.S. economy appears headed for a weaker phase—hardly a bullish scenario for markets.
Trump’s tariff action, the weak jobs report, and dollar weakness drove gold prices sharply higher on Friday. Gold surged more than two percent in a single day, ending at $3,363.50 per ounce—$73 higher. Holiday prices topped $3,415. However, it fell by 0.5 percent this morning to $3,347.
In Kerala, gold fell ₹80 per sovereign on Friday to ₹73,280, then surged ₹1,040 on Saturday to ₹74,320.
Silver ended Friday higher at $37.06 per ounce but slipped to $36.65 this morning.
International rubber prices dropped 2.31 percent to 165.00 cents/kg. Cocoa fell 3.47 percent to $8,211.23/tonne, and coffee dropped 2.98 percent. Tea rose 1.84 percent. Palm oil prices fell 0.75 percent.
The weak U.S. jobs report pushed the dollar index one percent lower to 99.14 on Friday; it dropped further to 98.95 this morning.
In currency markets, the euro slipped to $1.1555, the pound to $1.3258, and the yen to 147.78 per dollar. Yields on U.S. 10-year Treasuries rose to 4.243 percent as prices fell. Dollar weakness lifted the rupee slightly—it closed six paise stronger at ₹87.54. China’s yuan fell to 7.21 per dollar. The market expects Beijing to devalue the currency further to support trade.
Crude oil prices slumped as weak U.S. job data and tariff worries raised fears of slower growth and softer demand. Brent crude fell 2.23 percent on Friday to close at $69.67. The OPEC+ decision to raise output over the weekend dragged prices further. This morning, Brent was at $69.24, WTI at $66.94, and Murban crude at $71.68. Natural gas fell two percent.
Cryptocurrencies, which had declined following Coinbase’s poor earnings, rebounded. Bitcoin rose two percent to near $115,000. Ether gained four percent to $3,550.