Investor anxiety is mounting over the potential concessions India may have to make in the interim trade deal being negotiated with the United States. Indications suggest the pact could be finalised this weekend, but concerns remain that the US’s increasingly aggressive stance to isolate China may put India in a difficult position.
A key sticking point is the value-add threshold. In its recent deal with Vietnam, the US imposed a minimum 65 percent value addition requirement for assembled goods using Chinese components—failing which, a 40 percent tariff would apply. India has been pushing for a lower threshold of 35 percent but has received no indication that Washington will concede.
Despite the uncertainty, the Indian delegation in Washington remains hopeful of signing the trade agreement soon. Reports suggest India may agree to allow imports of genetically modified maize and soymeal used in cattle feed. However, other sensitive items such as grains and apples are unlikely to be included in the interim pact and will be taken up later.
Adding to the caution is stronger-than-expected US jobs data, which has dampened hopes of an early interest rate cut by the Federal Reserve. This could lead to continued outflows from emerging markets, including India.
Overnight, Gift Nifty derivatives settled at 25,560, down to 25,522 by early Friday, suggesting a modestly positive start for Indian markets.
European markets ended higher on Thursday after the upbeat US labour data lifted sentiment. Political stability in the UK also lent support after Prime Minister Keir Starmer confirmed that Chancellor Rachel Reeves would stay in her post. However, concerns remain over Labour’s weakening public support.
On Wall Street, US indices rallied despite trade uncertainty. The robust job data pushed equities higher, while bond prices slipped and yields climbed. Gold fell, pressured by the stronger dollar and delayed Fed easing.
Meanwhile, the US House of Representatives narrowly passed Donald Trump’s new tax bill with a 218–214 vote—a political win despite slim margins. The bill extends tax breaks from 2017 and includes controversial measures such as stripping Medicaid access from 12 million people and exempting tips from taxation, raising fiscal deficit concerns.
No major developments emerged from India-US trade talks on Thursday, but analysts note that the recently signed US-Vietnam trade deal sets a precedent for clamping down on countries re-exporting Chinese goods with minimal modification. Trump’s 40 percent punitive tariffs for insufficient value-addition could eventually be applied to Indian exports as well.
The Dow Jones Industrial Average rose 344.11 points (0.77 percent) to close at 44,828.53. The S&P 100 gained 51.93 points (0.83 percent) to end at 6,279.35—an all-time high—while the Nasdaq jumped 207.97 points (1.02 percent) to 20,601.10.
US stock futures were slightly lower in early Friday trade, with Dow, S&P, and Nasdaq futures all down by around 0.1 percent.
Asian indices were mostly positive on Friday. Japan’s Nikkei rose 0.35 percent, South Korea’s Kospi added 0.6 percent, while markets in China and Hong Kong opened weaker.
Indian equities closed lower on Thursday after a highly volatile session. The Nifty swung nearly 200 points during the day before settling with marginal losses. Initial optimism over a possible India-US trade pact was offset by fears about potential concessions and the Fed’s hawkish stance, triggering foreign fund outflows.
The Nifty 50 closed 48.10 points (0.19 percent) lower at 25,405.30. The Sensex dropped 170.22 points (0.20 percent) to 83,239.47, while Bank Nifty slipped 207.25 points (0.36 percent) to 56,791.95. Mid cap and small cap indices outperformed, with the Nifty Midcap 100 rising 0.03 percent and Smallcap 100 up 0.26 percent.
Market breadth remained negative. On the BSE, 1,939 stocks advanced while 2,084 declined. On the NSE, 1,450 shares gained and 1,470 fell. As many as 69 stocks hit 52-week highs, while 46 hit lows. Upper circuit was seen in 98 stocks; 52 hit the lower circuit.
Foreign institutional investors (FIIs) continued to offload shares, recording net sales of ₹1,481.19 crore in the cash segment on Thursday. Domestic institutional investors (DIIs) bought stocks worth ₹1,333.06 crore.
Traders expect further clarity on tariff levels under the trade pact to guide market direction. With Vietnam already slapped with 20 percent tariffs, India is not expecting major relief. Higher tariffs could weigh on sentiment. Nifty is expected to find support at 25,380 and 25,330, while facing resistance at 25,540 and 25,665.
Gold prices dropped as Fed rate cut hopes faded. Spot gold closed at $3,327.21 per ounce on Thursday, down 1 percent. Prices rebounded slightly to $3,328 in early Friday trade. In Kerala, gold rose ₹320 on Thursday to ₹72,840 per sovereign but may ease today.
Silver climbed to $36.78 per ounce, supported by increased industrial demand.
Rubber rose 0.18 percent to 165.30 cents/kg in global trade. Cocoa fell 2.54 percent to $7,949.69 per tonne, while coffee declined 2.3 percent. Tea prices remained stable. Palm oil dropped 0.37 percent.
The US dollar index closed higher at 97.18 on Thursday before slipping to 97.03 on Friday morning. The dollar strengthened across currencies, with the euro falling to $1.177 and the yen to 144.59 per dollar. The pound rebounded to $1.366. The Chinese yuan remained stable at 7.17 per dollar.
US 10-year Treasury yields climbed to 4.348 percent as bond prices fell.
The Indian rupee saw a sharp rebound, rising 39 paise to close at 85.31 per dollar after touching an intraday high of 85.19.
Crude oil prices slipped slightly as the dollar firmed. Brent crude closed at $68.80 per barrel on Thursday and dipped to $68.77 in early trade. WTI hovered at $67.06, while Murban crude stood at $70.04. Natural gas prices eased marginally.
Cryptocurrencies extended gains, with Bitcoin rising to $109,740 and Ether trading near $2,600.
