US President Donald Trump is continuing his tariff war. A 35 percent duty has been slapped on Canadian goods, while Mexico has been granted a 90-day extension on current rates. Switzerland faces a 39 percent tariff. Trump has also signed an order imposing tariffs ranging from 10 to 50 percent on several other countries. Meanwhile, the US Federal Appeals Court has begun hearing challenges to the President’s authority to impose such tariffs.
Some of the new tariffs came into effect on Thursday, while others will be implemented over the next few days, with some taking effect on the 12th and others by the end of the month.
India has made it clear that it will not bow to Trump’s demands. The government believes it is acceptable to take several weeks or even months to arrive at a deal that protects India’s interests. The official assessment is that the damage to exports will be manageable.
Trump’s measures have thrown the global export economy into deep uncertainty. This uncertainty and anxiety were evident in US and European markets on Thursday. US indices, which had recently surged to record highs amid optimism about a new era driven by artificial intelligence, fell slightly. Futures are also trading lower.
Asian markets opened lower on Friday. Crude oil prices declined, and the dollar continued to strengthen, with the dollar index staying above 100, putting additional pressure on the rupee.
In derivatives trading, Gift Nifty closed at 24,706.50 on Thursday night, opened at 24,722 on Friday morning, rose to 24,739, and later fell to 24,710, suggesting a weak start for Indian equities.
European markets also saw significant declines on Thursday, as company results disappointed. Rolls-Royce, which reported better-than-expected earnings and profits, raised its annual guidance, pushing its stock up 7 percent. However, shares of AB InBev, the world’s largest brewer, tumbled 12 percent due to a drop in Budweiser sales.
The S&P 500 and Nasdaq both closed lower after a strong start. The Dow fell 0.75 percent. While Microsoft and Meta beat earnings expectations, the tariff war dampened market sentiment. Recent GDP data suggested emerging obstacles to growth and a likely rise in inflation. These concerns dragged the markets down.
Microsoft’s stock rose 11 percent, pushing its market capitalisation past $4 trillion. Nvidia, the first to cross that mark, is now valued at $4.34 trillion.
The Dow Jones Industrial Average fell 330.30 points (0.74 percent) to close at 44,130.98. The S&P 500 slipped 23.51 points (0.37 percent) to 6,339.39, and the Nasdaq Composite declined 7.23 points (0.03 percent) to 21,122.45.
After trading hours, tech giant Apple reported better-than-expected results. iPhone sales rose 13 percent, with total revenue up 10 percent. The company grew 4 percent in China as well. CEO Tim Cook said future revenue outlook is positive, with increased investments in AI and potential acquisitions. Apple’s shares rose 2 percent. Amazon, which warned of slower revenue growth in the current quarter, saw its futures fall 7 percent.
Futures markets were subdued on concerns over the new tariffs and the pending court verdict. Dow, S&P and Nasdaq futures were down 0.13, 0.20 and 0.22 percent, respectively.
Asian markets were broadly lower on Friday. Japanese and Australian indices were flat, while South Korea fell 2 percent. However, Hong Kong and Chinese markets edged higher.
The combination of a steep 25 percent tariff and an unspecified penalty on Indian goods has unnerved investors. Still, the markets did not collapse. Optimism that the Modi government may reach a satisfactory trade deal in the coming weeks helped cushion the fall. After dropping over one percent at open, indices recovered to trade in the green before ending with significant losses. Foreign investors ramped up their selling.
The Nifty fell 86.70 points (0.35 percent) to close at 24,768.35. The Sensex lost 296.28 points (0.36 percent) to end at 81,185.58. Bank Nifty dropped 188.75 points (0.34 percent) to 55,961.95. The Nifty Midcap 100 slipped 541.70 points (0.93 percent) to 57,400.55, while the Smallcap 100 index shed 190.00 points (1.05 percent) to close at 17,966.85.
The broader market breadth favoured declines. On the BSE, 1,525 stocks advanced while 2,502 declined. On the NSE, 1,045 rose and 1,907 fell.
On the NSE, 72 stocks hit 52-week highs while 50 touched lows. As many as 82 stocks hit upper circuits and 60 hit lower circuits.
Foreign portfolio investors sold equities worth ₹5,588.91 crore in the cash segment on Thursday, while domestic institutional investors bought shares worth ₹6,372.71 crore.
Despite avoiding a full-scale collapse, the mood remains cautious. The absence of a trade deal with the US and rapidly rising tariffs leave no clear resolution in sight.
Nifty now has support at 24,600–24,500. On Friday, it may find support at 24,665 and 24,585, with resistance likely at 24,865 and 24,910.
Growing trade uncertainty pushed investors toward gold, aided by dollar volatility. Gold touched $3,312 per ounce before closing at $3,290.50, up $24.20. On Friday morning, it eased slightly to $3,287.
In Kerala, gold prices fell ₹320 per sovereign to ₹73,360 on Thursday. The rise in the dollar rate limited further decline. Unless the dollar weakens significantly on Friday, gold prices may fall further.
Silver prices fell 1.5 percent to $36.63 per ounce on Thursday.
The US has announced a 50 percent tariff on imports of refined copper, triggering concern in global markets. However, copper products used in manufacturing were spared. When the tariff was announced a month ago, New York copper prices rose 50 percent above London rates, but have since fallen sharply, narrowing the gap.
As trade concerns worsened, industrial metals including aluminium fell on Thursday. Copper dropped 0.96 percent to $9,605.65 per tonne. Aluminium fell 1.07 percent to $2,584.35. Nickel, lead, zinc and tin also declined.
On international commodity exchanges, rubber dropped 1.75 percent to 168.90 cents per kg. Cocoa gained 3.26 percent to $8,459 per tonne, coffee rose 0.70 percent, tea was up 1.84 percent, and palm oil rose another 0.02 percent.
The US dollar index continued its upward march, closing at 99.97 on Thursday and rising to 100.11 on Friday morning. In the currency market, the euro fell to $1.1405, the pound to $1.319, and the yen weakened to 150.83 per dollar. The yield on 10-year US Treasury notes rose to 4.38 percent as bond prices declined.
The dollar's strength weighed on the rupee. The Reserve Bank of India intervened to prevent the rupee from breaching 88. It closed at 87.60, up 18 paise. The sharp tariff on Indian exports is likely to widen the trade and current account deficits, further weakening the rupee. The Chinese yuan slipped to 7.20 per dollar.
Crude oil prices declined amid fears that the tariff war will not end soon and that global growth is stagnating. The expectation of weaker demand pushed prices down. Brent crude closed Thursday 1 percent lower at $72.53. On Friday morning, Brent traded at $72.49, WTI at $69.26, and Murban at $75.93. Natural gas prices fell 0.6 percent.
Cryptocurrencies remained volatile. Losses reported by exchange Coinbase in the second quarter weighed on the sector. Bitcoin dropped below $115,400, while Ether fell to $3,680.
