
Despite continued uncertainty over the direction of the ongoing tariff war, Asian markets and US futures saw an uptick on Tuesday morning, bringing a sense of optimism to Indian investors.
In the derivatives segment, Gift Nifty closed Monday night at 22,478.50, rising to 22,650 in early trade Tuesday. This indicates the Nifty 50 could open with gains of over 385 points.
The recently announced US tariff hike comes into force on Wednesday. A blanket 10% tariff on imports from all countries except China was implemented last Saturday. However, business leaders across the globe have urged Washington to delay the imposition of higher tariffs on nations excluding China. While the Trump administration has denied any such reconsideration, markets seem to be holding out hope. The US markets trimmed losses yesterday, and positive cues from futures and Asia this morning reflect this optimism.
President Trump also warned that if China continues with its 34% counter-tariff, an additional 50% duty may be imposed. China responded assertively, vowing to fight back, further fuelling fears of a prolonged trade war. There is growing concern that simultaneous stagflation and recession could severely impact livelihoods.
European markets closed on Monday with losses of up to 5%, having declined by an average of 8.5% the previous week.
US indices saw steep falls in early trade on Monday before recovering slightly. The S&P 500 dropped as much as 4.7% before closing with minor losses. The Nasdaq rebounded after a 5% dip to end marginally in the green, while the Dow Jones, despite recovering over 2,500 points from a 1,700-point fall, ended nearly 1% down.
By close on Monday, the Dow had lost 349.26 points (0.91%) to finish at 37,965.60. The S&P 500 declined 11.83 points (0.23%) to 5,062.25, and the Nasdaq ended 15.48 points (0.10%) lower at 15,603.26.
US futures rallied on Tuesday morning, with the Dow, S&P 500, and Nasdaq futures up 1.50%, 1.15%, and 1.16%, respectively.
After falling up to 13% on Monday, Asian markets showed signs of recovery. Japan’s Nikkei gained 6% at the open, Korea’s Kospi rose 2.5%, and indices in Hong Kong and China also edged higher.
India remains hopeful of avoiding Trump’s tariffs through a potential trade deal. On Monday, the government announced it would not allow Chinese EV giant BYD to begin production in India. Commerce Minister Piyush Goyal cited concerns over compliance, while reaffirming support for Tesla’s entry into India.
Goyal also blamed China’s disregard for labour laws and global trade norms for the current economic turmoil — a sentiment reflecting India’s intent to align more closely with US interests.
Buoyed by this stance, Indian markets recovered some losses through the day. The Sensex and Nifty, which had dropped 5% in the morning, closed down by around 3%. The Nifty touched an intraday low of 21,743, and the Sensex dipped to 71,425, before recovering post noon.
By close of trade Monday, the Nifty had lost 742.85 points (3.24%) to end at 22,161.60. The Sensex fell 2,226.79 points (2.95%) to close at 73,137.90. Bank Nifty declined by 1,642.60 points (3.19%) to 49,860.10. The mid cap index fell 3.63% (1,836.50 points) to 48,809.45, while the small cap index dropped 3.88% to 15,067.90.
Losers outnumbered gainers in the broader market. On the BSE, 500 stocks rose while 3,598 declined. On the NSE, 327 stocks advanced, while 2,640 fell.
Eighteen NSE stocks hit 52-week highs, while 645 touched 52-week lows. Twenty-six stocks hit upper circuits, and 384 were locked in lower circuits.
Foreign institutional investors sold equities worth ₹9,040.01 crore on Monday, while domestic funds bought shares worth ₹12,122.45 crore.
Gold prices continued to decline, falling below the $3,000 mark per ounce. After touching a low of $2,966 on Monday, gold closed at $2,984.20. However, prices bounced back slightly to $3,003 in early Tuesday trade.
Investors are increasingly favouring the US dollar over gold amid economic uncertainty. Analysts remain divided over the outlook. Suki Cooper of Standard Chartered now expects average gold prices of $3,300 between April and June, up from an earlier forecast of $2,900. She attributes this to stagflation concerns, noting a 61% rise during the 1973–75 crisis.
In Kerala, gold fell ₹200 on Monday to ₹66,280 per sovereign.
The dollar index closed Monday at 103.26, softening to 103.07 in early Tuesday trade. US bond yields rose as prices fell. The yield on 10-year Treasuries reached 4.191%.
Despite falling on Monday, US crude prices rose above $60 per barrel on Tuesday morning. Brent crude closed at $64.21 Monday and rebounded to $65.10 before easing to $64.81. WTI stood at $61.64, and UAE’s Murban crude traded at $66.18.
Fears of a global slowdown triggered wild swings in the crypto market. Bitcoin fell below $75,000 before rebounding above $79,500. Ethereum traded at $1,560.