Markets are shifting towards optimism. US President Donald Trump has clarified that he does not intend to remove Federal Reserve chair Jerome Powell. Meanwhile, US teasury secretary Scott Bessent stated that the trade war cannot continue indefinitely and that a resolution is inevitable.
These comments triggered a relief rally across markets. The US market surged on Tuesday, with futures rising by one and a half percent. The dollar strengthened, while gold declined. After a mild gain on Tuesday, Indian markets may leap ahead today.
In the derivatives market, Gift Nifty closed at 24,315 on Tuesday night and climbed to 24,390 this morning, indicating a strong start for the Nifty.
The IMF released a report highlighting a significant global slowdown. It now projects global growth at 2.8 percent for 2025, down from its January forecast of 3.3 percent. The 2026 forecast has also been revised downward from 3.1 to 3.0 percent, mainly due to escalating tariff conflicts.
India’s growth forecast for the 2025–26 financial year has been trimmed from 6.5 to 6.2 percent. The following year, growth may reach 6.3 percent. Despite the downgrade, India will remain the fastest-growing large economy.
The US growth forecast has been slashed from 2.7 to 1.8 percent, while China’s has been revised from 4.6 to 4 percent. The eurozone’s growth projection is at 0.8 percent. The fact that the IMF report does not point towards a recession is reassuring.
European markets ended slightly higher after trading in the red earlier in the day. Reports that Eli Lilly’s weight loss drug Orforglipron showed strong results pushed shares of competitors Novo Nordisk and Zealand Pharma down by 8.4 percent each.
US markets rebounded strongly on Tuesday, wiping out Monday’s losses. The optimism was fuelled by Bessent’s comment at a JP Morgan investor event, suggesting the current state of trade tensions with China could not continue.
Following market close, Trump announced he was not attempting to remove Powell. This led to a sharp rally in futures. Tesla reported a 20 percent drop in revenue after markets closed. Elon Musk said he would scale back government work next month to focus more on the company. Tesla shares, which rose 4.6 percent during the day, climbed another 4.5 per cent in after-hours trading.
On Tuesday, the Dow Jones Industrial Average surged 1,016.57 points (2.66%) to close at 39,186.98. The S&P 500 gained 129.56 points (2.51%) to end at 5,287.76. The Nasdaq jumped 429.52 points (2.71%) to finish at 16,300.42.
US futures were significantly higher this morning, with the Dow up 1.49%, the S&P up 1.78%, and the Nasdaq up 1.96%.
Asian markets, which were lower yesterday, opened strong today. Japan’s Nikkei surged 2%, South Korea’s market rose 2%, and Hong Kong’s index is also rallying.
After recent strong gains, the Indian market settled with modest gains on Tuesday. It opened lower but staged a strong recovery, only to lose most of the gains later in the session. The Sensex rose to 79,824 and the Nifty to 24,242 before ending slightly higher.
On Tuesday, the Nifty closed 41.70 points (0.17%) up at 24,167.25, while the Sensex added 187.09 points (0.24%) to finish at 79,595.59. The Bank Nifty rose 324.70 points (0.62%) to 55,647.20. The Midcap 100 index gained 0.78% (422.70 points) to reach 54,397.15, while the Smallcap 100 index rose 0.73% to close at 16,896.00.
Barring IT and oil & gas, all sectors posted gains yesterday, with realty, FMCG, and consumer durables leading the way.
The advance-decline ratio in the broader market remained positive. On the BSE, 2,459 stocks advanced while 1,526 declined. On the NSE, 1,834 shares gained and 1,059 fell.
Seventy-one stocks on the NSE hit 52-week highs, while eleven touched their 52-week lows. 155 stocks hit the upper circuit and 46 the lower circuit.
Foreign investors were net buyers again yesterday, with purchases worth ₹1,290.43 crore in the cash market. Domestic funds sold shares worth ₹885.63 crore.
Although the market did not end in a bullish tone, developments suggest conditions are favourable for a continued rally. Technical analysts believe that if Nifty crosses 24,200, it could move swiftly towards 24,550. Immediate support is seen at 24,100 and 23,995, with resistance around 24,225 and 24,330.
HCL Technologies reported a 1% decline in dollar revenue and a 6.2% drop in profit, with margins falling from 19.5% to 18%. It expects revenue growth of 2% to 5% in dollar terms next year.
Mahindra & Mahindra Financial Services reported a 9% increase in interest income but a 9% decline in profit. Cyient posted an 18.3% revenue increase and a 36.5% jump in profit to ₹310 crore. Tata Communications' net profit soared 223% to ₹1,040 crore, aided by a one-off gain of ₹578 crore. AU Small Finance Bank’s profit declined by 4.7%. Delta Corp reported a profit increase of 127% despite a fall in revenue, thanks to a one-time gain.
Companies announcing results today include Tata Consumer, Mindtree, Bajaj Housing, Can Fin Homes, Dalmia Bharat, Rallis India, Maharashtra Scooters, Supreme Petrochem, Tamilnad Mercantile Bank, Aztec Life, and Venkys India.
Hopes of a trade truce and Trump’s assurance that Powell will not be removed dragged gold off recent highs. On Monday, gold surged $96.40 to close at $3,425.40 per ounce. Yesterday, it climbed to $3,492.80 before falling back to $3,328.60. This morning, it rebounded to $3,375.
In Kerala, gold rose ₹2,200 on Monday to ₹74,320 per sovereign, marking a record daily increase. Prices are expected to fall sharply today. Silver is trading at $32.54 this morning.
In global markets, rubber declined by 1.3% to 166.90 cents/kg. Cocoa surged 5.69% to $9,244.56, coffee rose 3.35%, while palm oil slipped 0.20%.
The dollar index rose over 1% on Tuesday to close at 98.92, and climbed to 99.35 this morning. The euro dipped to $1.138, the pound to $1.328, and the yen fell to 142.34 per dollar. US bond prices rose today, with yields falling to 4.356%.
The rupee slipped slightly on Tuesday, with the dollar gaining 8 paise to close at ₹85.22. The dollar is expected to strengthen further. China’s currency weakened to 7.31 yuan per dollar.
Crude oil prices have rebounded. Brent rose to $68.03, WTI to $64.31, and UAE’s Murban crude to $68.68.
Cryptocurrencies are on a strong upward trajectory. Bitcoin crossed $90,000 for the first time in months and is trading near $92,500 this morning. Ethereum has climbed to $1,750.
