When Donald Trump first announced new tariffs in April, markets tumbled. Three months later, a fresh round of tariff hikes left markets largely calm. Expectations that implementation may be delayed—or even reversed—have helped settle investor nerves. However, Trump’s recent remarks have not reassured markets. While no new letters were sent to additional countries on Tuesday, other potentially disruptive announcements were made. These include a 50 percent tariff on copper and a plan to raise duties on pharmaceuticals to 200 percent over the next 18 months. He also confirmed that tariff hikes set for August 1 would not be postponed.
Despite earlier hints by Indian government officials that an interim US-India trade deal would be announced on Tuesday, no such development occurred. Hopes are now pinned on the end of the month.
In China, June’s wholesale price index dropped 3.6 percent, fuelling fears of deflation and a broader economic slowdown. Consequently, markets in Hong Kong and Australia saw further declines.
Asian markets remain choppy today. U.S. futures are also trending lower. Crude oil briefly climbed above $70 per barrel before easing slightly.
In the derivatives segment, Gift Nifty closed at 25,590.50 on Tuesday night but slipped to 25,575 this morning, suggesting a likely soft start for Indian equities.
European markets closed higher on Tuesday, with no significant panic over the US tariff hikes. Investors there are more focused on progress in discussions with the European Union. Though most of the session saw European indices in the red, they rebounded sharply in the final hour. Even as sales in China and Germany dropped nearly 25 percent, Porsche shares ended slightly higher.
US equities closed almost flat, with analysts interpreting the performance as a sign of calm amid tariff tensions. Market reactions indicate scepticism about Trump’s intent to follow through. The prevailing joke among traders—TACO: Trump Always Chickens Out—suggests a belief that he will not implement the steep hikes. Trump’s recent statement that August 1 is not a hard deadline only fuelled this perception. However, fresh post-market announcements suggest he may not backtrack after all.
The Dow Jones closed down 165.66 points (0.37 percent) at 44,240.80. The S&P 500 shed 4.46 points (0.07 percent) to finish at 6,225.82. The Nasdaq Composite edged up 5.95 points (0.03 percent) to 20,418.50.
US futures remained weak this morning: Dow down 0.14 percent, S&P 0.12 percent, and Nasdaq 0.10 percent.
Asian indices are also volatile. Japan’s Nikkei swung between gains and losses. The Korean market slipped 0.20 percent. Markets in Hong Kong and China opened lower.
Despite lingering uncertainty over the trade deal, last-minute speculation about a possible announcement at 10:30 PM helped lift Indian markets late on Tuesday. (The rumour proved unfounded.)
Meanwhile, BSE Limited, which was already under pressure after the Jane Street market manipulation case, fell another 5.55 percent on Tuesday—an 11 percent drop over two days. Depository firm CDSL declined by nearly 1.5 percent. Angel One lost 3.7 percent yesterday and nearly 9 percent over two days. Nuvama Wealth Management, also linked to Jane Street, shed 10 percent in two days and is reportedly attracting acquisition interest from three foreign firms.
Titan shares dropped 6.17 percent on weak Q1 sales expectations, particularly in jewellery. However, Morgan Stanley and CLSA maintained their target prices at ₹3,876 and ₹4,326, respectively.
Gabriel India, which has gained 98 percent year-to-date, jumped 7.66 percent on Tuesday to close at ₹992. Anand Rathi Research set a new target of ₹1,400.
Reliance’s Alok Industries surged up to 6 percent before ending 9.6 percent higher after the US imposed a 35 percent tariff on Bangladesh. Alok, an exporter of garments and fabrics, led gains among Indian textile exporters such as Kitex Garments, Raymond Lifestyle, Vardhman, Trident, Welspun Living, Arvind, Gokaldas, Indo Count, and KPR Mills. India may now face tariffs of nearly 25 percent.
The US tariff on copper is expected to sharply lower prices. Copper stocks could suffer, while electrical cable manufacturers may benefit. Consumer durable companies are also expected to gain.
On Tuesday, the Nifty closed up 61.20 points (0.24 percent) at 25,522.50. The Sensex gained 270.01 points (0.32 percent) to 83,712.51. Bank Nifty rose 307.10 points (0.54 percent) to end at 57,256.30. The Midcap 100 fell 100.30 points (0.17 percent) to 59,415.45, while the Smallcap 100 lost 54.95 points (0.29 percent) to 18,895.20.
Market breadth remained negative: on the BSE, 1,854 stocks advanced while 2,176 declined. On the NSE, 1,350 stocks rose and 1,561 fell.
Fifty-six NSE stocks hit 52-week highs, while 41 hit lows. Eighty-six stocks hit upper circuits; 62 were locked in lower circuits.
Foreign investors were net sellers in the cash segment, offloading ₹26.12 crore worth of shares. Domestic funds bought ₹1,366.82 crore worth.
All eyes are now on whether the Nifty can hold above the 25,500 mark. Key support levels are at 25,450 and 25,375, while resistance may be encountered at 25,550 and 25,620.
Gold prices continued to decline. Market expectation that the U.S. may delay tariff implementation pushed gold below $3,300 per ounce. It later recovered slightly to close at $3,302.28 and rose to $3,305 this morning.
In Kerala, the price of gold rose ₹400 on Tuesday to ₹72,480 per sovereign. Prices may drop today. Silver slipped to $36.53 per ounce.
Most industrial metals gained on Tuesday, but after market hours, the U.S. announced a 50 percent tariff on copper. Copper prices jumped 13.2 percent in U.S. trading but later plunged in London. Copper, the third most-used industrial metal in the U.S. after steel and aluminium, is largely imported from Chile. Analysts expect prices to drop as low as $8,800 per tonne.
On Tuesday, copper rose 0.33 percent on the London Metal Exchange to $9,925 per tonne. Aluminium climbed 0.51 percent to $2,586.65. Nickel, lead and zinc rose, while tin fell.
International rubber prices dropped 0.43 percent to 162 cents/kg. Cocoa fell 2.23 percent to $7,984.23/tonne. Coffee gained 2.3 percent. Tea prices were unchanged. Palm oil rose 0.60 percent.
The US dollar rose slightly on Tuesday. The dollar index closed at 97.52 and ticked up to 97.55 this morning.
In currency markets, the euro fell to $1.1721 and the pound to $1.3582. The Japanese yen weakened to 146.83 per dollar.
Yields on U.S. 10-year Treasury bonds climbed to 4.407 percent as bond prices declined.
After some intraday fluctuations, the Indian rupee closed with modest gains. The dollar slipped 15 paise to ₹85.70. The Chinese yuan stood at 7.17 per dollar.
Crude oil prices continued to rise in the absence of new Red Sea attacks. This morning, Brent crude traded at $70.02 per barrel, WTI at $68.17, and Murban crude at $71.30. Natural gas prices, however, dropped 2 percent.
Cryptocurrencies were also higher. Bitcoin surged past $109,000, while Ether rose to $2,612.
