Global markets slipped after it became evident that the understanding reached in the recent US-China trade talks wasn’t particularly beneficial to other countries. Even for the US, the outcomes didn’t seem to yield any significant advantage, according to emerging reports.
Meanwhile, the collapse of nuclear talks between the US and Iran sparked fresh concerns. The US has reportedly instructed the families of its soldiers stationed in West Asia to return, and there are plans to bring embassy staff back from Iraq as well, fuelling war fears. Crude oil prices crossed $70 per barrel, and gold saw a steep rise.
India’s retail inflation figures for May are expected to be released on June 12. Projections suggest the figure will remain below 3%.
US Treasury Secretary Scott Besant remarked that countries currently in trade negotiations with the US may consider temporary tariff waivers until deals are finalised. Earlier, Washington had insisted on finalising agreements by July 9. Talks between India and the US remain ongoing, but current signs appear somewhat favourable for India. Former US President Donald Trump had proposed a 26% countervailing duty on Indian goods.
The GIFT Nifty closed at 25,215 on the night of June 11, falling to 25,158 by the morning. This signals that Indian markets are likely to open weaker. European markets closed lower on June 11, amid disappointment over the US-China deal. US markets also closed in the red after a volatile session. Trump’s vague statement on the outcome of the talks left investors dissatisfied, and China did not issue any response.
Trump noted that China would continue supplying rare earth elements and would grant study visas to Chinese students. However, the existing 55% import duty on Chinese goods would remain unchanged. US Commerce Secretary Howard Ludnick confirmed there would be no reduction in tariffs. Trump’s speech also made no mention of supplying rare earths to other nations.
China had issued a six-month export licence for rare earths following talks in Geneva, leaving the door open for possible disruptions in supply that could impact the US and other countries. The continuation of the 55% tariff is expected to drive up consumer prices in the US. Retailers have complained about the impact, with some noting that the deal may merely encourage rerouting of Chinese goods through Vietnam and Thailand.
Elon Musk, who recently had a falling out with Trump, expressed regret over his social media remarks. Despite announcing the launch date for Tesla’s much-awaited robo-taxi service, markets remained lukewarm, and the company’s share rose just 0.1%.
Although US inflation in May rose slightly, it came in below expectations. Markets saw it as a relief factor. Trump used the numbers to increase pressure on the Federal Reserve to cut interest rates by at least 1%.
There’s growing speculation that Treasury Secretary Scott Besant might replace Jerome Powell as the Fed chair when his term ends next March.
The Dow Jones Industrial Average fell by just 1.10 points (0.00%) to close at 42,865.77. The S&P 100 dropped 16.57 points (0.2%) to end at 6022.24, while the Nasdaq Composite lost 99.11 points (0.50%) to close at 19,615.88. US futures also declined, with the Dow down 0.25%, the S&P down 0.28%, and the Nasdaq down 0.35%.
Asian markets opened in the red on June 12. Japan’s Nikkei dropped 0.60%, and Chinese indices were also in negative territory.
Indian stock markets moved in different directions on June 11. While benchmark indices rose significantly after early fluctuations, they failed to sustain the gains and closed with only marginal upticks. Mid- and small-cap indices initially rose but later tumbled, ending with notable losses. Investors continued to book profits, keeping the markets volatile.
Banking, finance, and FMCG stocks weighed on the indices, while IT and oil & gas sectors provided some support.
On Wednesday, the Nifty rose by 37.15 points (0.15%) to close at 25,141.40, while the Sensex ended 123.42 points (0.15%) higher at 82,515.14. The Bank Nifty, however, fell by 169.35 points (0.30%) to end at 56,459.75. The Nifty Midcap 100 index declined by 293.25 points (0.49%) to 59,388.15, and the Smallcap 100 index slipped by 101.05 points (0.53%) to close at 18,798.75.
The broader market trend slightly favoured gainers. On the BSE, 2,208 shares rose while 1,856 declined. On the NSE, 1,608 shares advanced and 1,303 fell. As many as 76 stocks on the NSE hit 52-week highs, while 21 touched new lows. A total of 131 stocks hit the upper circuit, and 37 touched the lower circuit.
Foreign Institutional Investors (FIIs) sold equities worth ₹446.31 crore in the cash segment, while Domestic Institutional Investors (DIIs) bought stocks worth ₹1,584.87 crore.
The Nifty once again failed to move past the 25,200 mark. Key support levels for June 12 are seen at 25,095 and 25,005, while resistance may emerge around 25,200 and 25,290.
The Maharashtra government’s move to hike excise duty has impacted Indian-made foreign liquor companies. The duty has been raised by 50%, making it 4.5 times the production cost. As a result, stocks like United Spirits, Allied Blenders, and Radico Khaitan fell by up to 7%. Interestingly, tax on wine and beer remained unchanged, helping stocks like Sula Vineyards and GM Breweries gain 7.7% and 11% respectively.
Defence stocks faced pressure due to profit booking. Shares of Cochin Shipyard, Mazagon Dock, Garden Reach, Bharat Electronics, Bharat Dynamics, HAL, Data Patterns, and Paras Defence closed lower.
Disappointing US-China trade results and worsening tensions between the US and Iran boosted the appeal of gold as a safe-haven asset. Gold prices jumped as investors sought security.
Gold rose from $3,315 to as high as $3,374 per ounce before closing at $3,367.70. By morning, it had touched $3,376.
In Kerala, gold prices increased by ₹600 per sovereign, reaching ₹72,160.
Silver, after reaching record levels, cooled slightly to $36.30 per ounce.
The US dollar weakened again. The dollar index closed lower at 98.63 and dropped further to 98.33 the next morning.
In forex markets, the euro strengthened to $1.152, the pound rose to $1.358, and the Japanese yen appreciated to 144.00 per dollar.
Yields on US 10-year bonds fell to 4.397% as bond prices climbed.
The Indian rupee gained nine paise to close at ₹85.51 against the dollar on June 11.
China’s yuan depreciated to 7.19 per dollar.
