The United States and the European Union have reached a comprehensive trade agreement after talks held at former President Donald Trump’s resort in Turnberry, Scotland, with EU Commission President Ursula von der Leyen.
As per the agreement, the US will impose a 15 percent tariff on European goods, while the EU will maintain existing duties on US products. The EU has committed to purchasing $75 billion (₹6.37 lakh-crore) worth of fuel from the US and investing $60 billion (₹5.09 lakh-crore) in American capital markets. The deal has eased concerns of a major trade war, with US futures climbing in early trade today.
Talks are also expected today in Europe to extend the ongoing US-China trade agreement by another 90 days.
However, there has been no formal announcement from Trump regarding a trade deal with India. New Delhi anticipates that the 15 percent tariff rate applied to the EU will also be imposed on Indian goods. Vietnam and Indonesia face duties of 20 and 19 percent respectively, while Japan is at 15 percent. Tariffs for Bangladesh remain undecided. The 15 percent rate is seen as beneficial for India, especially compared to earlier expectations of a 10 percent levy.
The Indian equity markets recorded their fourth straight week of losses last week, weighed down by uncertainty over trade negotiations and weak corporate results. A resolution to the trade discussions is expected soon, with new tariffs set to come into effect this Friday, according to Trump's announcement.
Tata Consultancy Services (TCS), India’s largest IT services company, has announced that it will cut 2 percent of its workforce — over 12,000 jobs — this year due to declining demand triggered by widespread AI adoption. The company, which has over 6,00,000 employees globally, said that automation has reduced the need for traditional IT services. Given the broader trend of IT firms posting weaker-than-expected earnings, the move could trigger further negative sentiment in the markets.
The second-quarter US GDP data is expected this week, with projections of a 2.4 percent increase, a sharp rebound from the 0.5 percent contraction in Q1. The US Federal Reserve is scheduled to announce its monetary policy decision on Wednesday, with most analysts expecting no rate cuts at this time. The next possible cut is likely in mid-September.
In derivatives trade, Gift Nifty closed at 24,842.00 on Friday night and moved slightly higher to 24,863 before dipping to 24,819 on Monday morning — signalling a likely weak start for Indian equities.
Most European markets, excluding France, closed lower on Friday amid uncertainty around the US-EU agreement, which Trump described as having only a “50:50” chance.
Meanwhile, US markets closed higher, with the S&P 500 and Nasdaq hitting fresh records — their 14th and 15th for the year, respectively. All three major indices posted weekly gains: Dow up 1.3 percent, Nasdaq flat, and S&P up 1.5 percent. Among the 169 companies that reported Q2 results on the S&P 500, 82 percent beat market expectations.
Dow Jones: up 208.01 points (0.47%) at 44,901.92
S&P 500: up 25.29 points (0.40%) at 6,388.64 (record close)
Nasdaq Composite: up 50.36 points (0.24%) at 21,108.32 (record close)
US futures rose on Monday with Dow up 0.33 percent, S&P up 0.37 percent, and Nasdaq up 0.50 percent.
Asian markets were mixed as concerns over a US-China trade war appeared to ease. Japan’s market opened lower while South Korean and Australian indices began higher.
Weakness across sectors excluding pharmaceuticals and healthcare dragged Indian markets lower on Friday. Small caps fell 2.10 percent, while mid caps declined 1.61 percent. IT, metals, oil & gas, auto, and media stocks saw notable losses. The Nifty index has now posted four consecutive weekly declines for the first time since October 2024.
Nifty 50: down 225.10 points (0.90%) at 24,837.00
Sensex: down 721.08 points (0.88%) at 81,463.09
Bank Nifty: down 537.15 points (0.94%) at 56,528.90
Midcap 100: down 951.25 points (1.61%) at 58,009.45
Smallcap 100: down 392.35 points (2.10%) at 18,294.45
Market breadth remained negative. On the BSE, only 1,061 stocks advanced while 2,969 declined. At the NSE, 591 stocks rose while 2,350 fell. Additionally, 42 stocks hit 52-week highs, 36 reached 52-week lows, 29 stocks hit upper circuits, and 93 hit lower circuits.
Foreign portfolio investors sold shares worth ₹1,979.96 crore on Thursday, while domestic funds bought equities worth ₹2,138.59 crore.
Support for the Nifty has shifted lower from 25,000 to around 24,700. Intraday support is seen at 24,805 and 24,755, while resistance is expected near 24,960 and 25,010.
Gold prices continued to fall on indications of a US-EU trade deal. Spot gold dropped $31 on Friday to close at $3,338 per ounce, slipping to $3,326 this morning before rebounding to $3,337.
In Kerala, gold prices fell ₹360 on Friday to ₹73,680 per sovereign and dropped another ₹400 on Saturday to ₹73,280.
Silver ended Friday at $38.08 per ounce and rose to $38.15 this morning.
Rubber rose 2.42 percent internationally to 173.60 cents/kg. Cocoa gained 2.58 percent to $8,333.67 per tonne. Coffee fell 2.52 percent and tea dropped 2.09 percent. Palm oil fell 1.25 percent.
The US dollar index, which rose towards the weekend, weakened slightly to 97.50 this morning from 97.65 on Friday.
The euro rose to $1.1763, the pound climbed to $1.3444, and the Japanese yen slipped to 147.73 per dollar.
Despite the softer dollar, the Indian rupee weakened by 11 paise to close at 86.52 per dollar on Friday. The Chinese yuan held steady at 7.15 per dollar.
The 10-year US Treasury yield remained largely unchanged at 4.396 percent.
Crude oil prices recovered this morning after weekend declines. Brent crude rose from $68.44 per barrel on Friday to $68.84. WTI traded at $65.50 and Murban crude at $71.20.
Cryptocurrencies surged, with Bitcoin climbing above $119,300 and Ether rising to $3,860.
