US President Donald Trump has escalated his global trade offensive by imposing a steep 35 percent tariff on imports from Canada and announcing plans to impose duties ranging from 15 to 20 percent on most other countries. The new levies are over and above previously declared higher tariffs on steel, aluminium, copper, automobiles, and pharmaceuticals.
While Trump did not mention India, a delegation from New Delhi is expected in Washington shortly for trade negotiations. The Indian government was forced to walk back an earlier claim that an interim deal had been finalised.
In a televised ‘Meet the Press’ appearance, Trump said the current 10 percent duty on all countries would soon be increased, with specific rates for individual nations to be announced in the coming days. The comments triggered a sell-off in US futures, weakened Asian markets, pushed up gold and crude oil prices, and are expected to lead to a subdued opening in Indian equities.
The US President clarified that the sharp 35 percent tariff on Canada was in response to retaliatory tariffs imposed by Ottawa.
Quarterly results announced by TCS and Tata Elxsi yesterday confirmed market concerns. While TCS saw revenue decline, net profit rose six percent—short of the three percent increase expected by analysts. Despite the rise, leading brokerages cut their price targets on the stock, suggesting it may fall further today.
In overnight trading in New York, Infosys and Wipro ADRs dropped 4 and 5 percent respectively, signalling further pressure on Indian IT stocks.
On the derivatives side, Gift Nifty closed on Thursday night at 25,336.50 and briefly fell to 25,268 early Friday before recovering slightly, suggesting a likely weak opening.
European indices ended higher despite tariff uncertainties. Britain's and France’s benchmarks rose over 1.5 percent, while Germany’s index dipped slightly. Investors are still hoping Trump might withdraw the tariff hike at the last minute.
US markets ignored the trade war rhetoric and closed at record highs. The Dow Jones rose 192.34 points (0.43 percent) to end at 44,650.64. The S&P 500 gained 17.20 points (0.27 percent) to close at a record 6,280.46, while the Nasdaq Composite added 19.33 points (0.09 percent) to end at 20,630.66.
However, US futures are sharply lower this morning, with the Dow, S&P, and Nasdaq each falling between 0.51 and 0.56 percent. Most Asian markets opened lower, with Japan’s Nikkei losing early gains and Korean stocks also sliding. Hong Kong and Chinese markets also opened in the red.
Indian stocks fell again on Thursday amid fresh concerns over the lack of progress in trade talks with the US and poor corporate results. Only realty, metal and consumer durables managed gains.
BSE Ltd, CDSL, and Angel One continued to rise in the wake of the Jane Street short-selling scandal, but Nuvama Wealth Management edged up only slightly. Companies linked to Vedanta, which is facing financial fraud allegations by a US short seller, saw minimal declines.
Manappuram Finance, which had fallen the previous day due to declining gold prices, gained over 1 percent on Thursday.
The Nifty fell 120.85 points (0.47 percent) to close at 25,355.25, while the Sensex declined 345.80 points (0.41 percent) to 83,190.28. Bank Nifty dropped 257.55 points (0.45 percent) to 56,956. Mid Cap 100 lost 179.65 points (0.30 percent) to 59,159.95, while Small Cap 100 rose 51.15 points (0.27 percent) to 19,007.40.
Market breadth remained weak with declines outnumbering advances. On the BSE, 2,142 stocks fell versus 1,887 gainers. On the NSE, 1,521 stocks declined while 1,387 rose.
At the NSE, 68 stocks hit 52-week highs, while 29 hit lows. As many as 101 stocks hit the upper circuit and 34 hit the lower circuit.
Foreign institutional investors made net purchases of ₹221.06 crore in the cash segment, while domestic mutual funds bought shares worth ₹591.33 crore.
Technical analysts warned that the Nifty’s failure to hold the 25,400 level could trigger a deeper correction. Foreign brokerages believe the P/E ratios of several stocks may have to be revised downward. A drop below the 25,300 support level could push the index below 25,000.
Key support levels for Friday are seen at 25,330 and 25,220, while resistance is expected around 25,480 and 25,530.
Trump’s announcement of a 50 percent tariff on copper imports, effective from August 1, will lift total US import duties on aluminium, steel, and copper to that same level. The US imports half its copper and aluminium, and 22 percent of its steel.
The higher duties are expected to sharply raise costs for autos, factory equipment, and construction materials. While copper trades at around $10,000 per tonne globally, Americans may have to pay as much as $15,000.
Copper prices surged on the COMEX overnight, while gains in London were modest. Shanghai copper prices declined.
The average US import tariff, which was 2.4 percent in December, will rise to 17.5 percent following these announcements—likely pushing inflation up by 1.7 percent and adding $2,300 annually to the average household’s costs.
Gold rose cautiously on Thursday as a strong dollar and rallying US equities and bonds reduced the metal’s appeal. However, it surged to $3,335 per ounce on Friday morning, following JPMorgan Chase CEO Jamie Dimon’s warning that markets are underestimating the risks of Trump’s trade policies.
In Kerala, gold rose ₹160 per sovereign to ₹72,160 on Thursday and may rise further today. Silver climbed to $37.02 per ounce.
Rubber prices edged up 0.06 percent to 162.70 cents/kg in the international market. Cocoa was at $8,742 per tonne. Coffee rose 1.42 percent, tea by 0.58 percent, and palm oil by 0.24 percent.
The US dollar strengthened slightly, with the dollar index rising to 97.84 from Thursday’s close of 97.65. The euro fell to $1.168, the pound to $1.356, and the yen to 146.72 per dollar. US 10-year bond yields rose to 4.36 percent.
The rupee ended Thursday slightly weaker after some volatility, with the dollar closing six paise higher at ₹85.73. China’s yuan remained stable at 7.18 per dollar.
Crude oil prices dipped. Brent fell 2 percent in early trade to $68.78 per barrel, before recovering to $69.05. WTI stood at $67.04, and Murban crude at $70.44. Natural gas prices rose by 1 percent.
Cryptocurrencies rallied, with Bitcoin briefly touching $115,900 before easing. Ethereum rose to $2,951. Other tokens are also trading near record levels.