Exporters are bracing for a potential setback as signs grow that India’s much-anticipated trade agreement with the US will not be finalised anytime soon. Failure to seal a deal by August 1 could result in a 26 percent tariff being imposed on several Indian exports—significantly higher than those levied on competing nations such as Vietnam, Indonesia, and possibly Bangladesh.
Exporters from key sectors like garments, seafood, and jewellery are urging swift action, but negotiations remain stalled with Washington showing little inclination to meet India's key demands.
Despite a weakening dollar, the Indian rupee continues to face downward pressure, partly due to fears that export earnings could shrink in the absence of a deal.
Markets started the week with strong momentum, but analysts caution that sustaining the rally may be challenging without further clarity on the trade deal and global macro indicators. In derivatives trade, Gift Nifty closed at 25,182 on Monday night and rose slightly to 25,190 this morning, suggesting a positive open for Indian equities.
European markets closed mixed on Monday as uncertainty over the India-US trade deal weighed on investor sentiment. In London, the FTSE 100 faces downside pressure, with 59 constituent companies warning of lower Q2 earnings. UK consumer sentiment fell to a three-year low, and unemployment has reached its highest level since 2021.
In the US, markets opened higher but ended mixed. The S&P 500 closed above the 6,300 mark for the first time, rising 8.80 points (0.14 percent) to 6,305.60. The Nasdaq Composite gained 78.52 points (0.38 percent) to 20,974.17, while the Dow Jones slipped 19.12 points (0.04 percent) to close at 44,323.07.
Tech giants are set to release their Q2 earnings this week. Analysts expect the S&P 500 to post a 3.4 percent earnings growth, while the so-called 'Magnificent Seven' tech stocks could report a 14 percent surge.
US futures showed modest gains early Tuesday, with the Dow up 0.13 percent, the S&P 500 by 0.06 percent, and the Nasdaq by 0.04 percent.
Asian markets opened strong. Stocks in Japan, South Korea, Australia, Hong Kong, and China saw gains. In Japan, political pressure is mounting on Prime Minister Shigeru Ishiba to resign following a poor election performance, even as he is expected to stay on until trade talks with the US conclude.
After a two-day decline, Indian markets rallied sharply on Monday, led by strong Q1 earnings from major banks. The Nifty closed up 122.30 points (0.49 percent) at 25,090.70, while the Sensex gained 442.61 points (0.54 percent) to end at 82,200.34. Bank Nifty surged 669.75 points (1.19 percent) to 56,952.75.
HDFC Bank and ICICI Bank posted robust quarterly numbers, with both stocks climbing over 2 percent. The private banking index gained 1.26 percent, although public sector banks underperformed.
Reliance Industries, despite posting strong results, fell 3.2 percent as funds booked profits. Shares of Eternal (Zomato) jumped 7.5 percent, even after a 90 percent drop in profits, driven by growth in revenue and aggressive expansion of its quick-commerce arm Blinkit, which opened 243 new stores in Q1.
Foreign institutional investors (FIIs) sold shares worth ₹1,681.23 crore in the cash market on Monday, while domestic institutions bought ₹3,578.43 crore.
Mid- and small-cap performance was mixed: Nifty Midcap 100 rose 363.85 points (0.62 percent) to 59,468.35, while the Smallcap 100 dipped marginally by 1.35 points (0.01 percent) to 18,958.30.
NSE saw 85 stocks hit 52-week highs, while 29 touched new lows. Upper circuit breakers were hit on 87 stocks, with 76 on the lower circuit.
Analysts say further upside will depend on the Nifty sustaining above 25,250. Immediate support lies at 24,940 and 24,800, with resistance around 25,110 and 25,250.
India’s core sector grew just 1.7 percent in June, compared to 5 percent a year ago. While slightly better than May’s 1.2 percent growth, it signals continued weakness. The eight core industries contribute 40.27 percent to the IIP.
Production fell in coal (6.8 percent), crude oil (1.2 percent), natural gas (2.8 percent), fertilisers (1.2 percent), and electricity (2.8 percent), while steel (9.3 percent), cement (9.2 percent), and refinery products (3.4 percent) grew. For April–June, growth slowed to 1.3 percent versus 6.2 percent last year.
Gold prices surged as global uncertainty drove investors to safe-haven assets. Spot gold jumped $47 to close at $3,397.70 per ounce on Monday, before easing slightly to $3,403 this morning. In Kerala, gold rose ₹80 per sovereign to ₹73,440.
Silver closed at $38.86 per ounce and remains near 14-year highs, with expectations of testing the $41 level.
Rubber gained 0.42 percent to 168.80 cents/kg internationally. Cocoa jumped 4.56 percent to $8,156/tonne, while coffee and tea prices declined. Palm oil prices fell 2.09 percent.
The US dollar index continued its decline, closing at 97.85 on Monday and edging up to 97.93 in early trade. The euro rose to $1.1687 and the pound to $1.348, while the yen traded at 147.52 per dollar.
Yields on US 10-year treasuries eased to 4.376 percent as investors scaled back recession fears.
The Indian rupee fell despite RBI intervention, with the dollar closing 14 paise higher at ₹86.29 after touching ₹86.35 intraday. The Chinese yuan remained steady at 7.18 per dollar.
Crude oil extended losses after the weekend. Brent fell to $68.82 per barrel. In early trade, WTI stood at $66.87 and Murban crude at $70.92. Natural gas prices also declined.
Cryptocurrencies remained weak. Bitcoin hovered near $117,000, while Ether stayed below $3,750.
