A partial climbdown by Donald Trump in the ongoing tariff war has reignited investor sentiment across global markets. As Indian markets reopen after a long weekend, they appear poised to catch up with the global uptrend.
India’s March retail inflation data will be released in the afternoon on Tuesday. While February's reading stood at 3.61%, a Reuters poll predicts March inflation to be 3.60%. Other forecasts place it slightly higher, between 3.8% and 4.0%. Wholesale inflation is also expected to tick up from 2.38% in February to 2.5% in March.
Trump has once again softened his stance in the tariff dispute. Additional duties on technology products such as iPhones, smartphones and laptops have been deferred. A blanket 10% tariff will now apply to all countries, with China alone facing a higher 25% rate. Though Trump added a layer of uncertainty by announcing on Sunday that replacement duties would be revealed later, markets took comfort in what they see as a more measured approach from the US administration.
In the derivatives market, Gift Nifty closed at 23,120 on Friday night and rose to 23,305 by Monday night. It hit 23,315 on Tuesday morning, suggesting a possible 400-point jump for the Nifty at opening.
European markets, which had ended lower on Friday, rallied sharply on Monday—climbing over 2.5%—buoyed by reduced tariffs on tech imports.
Wall Street also staged a strong rebound. After opening weak on Friday, major indices closed with sharp gains. The Dow Jones rose 4.95%, the S&P 500 gained 5.7%, and the Nasdaq surged 7.3% over the week.
On Friday, the Dow closed up by 619.05 points (1.56%) at 40,212.70. The S&P 500 added 95.31 points (1.81%) to close at 5,363.36, while the Nasdaq jumped 337.14 points (2.06%) to 16,724.50. The rally extended into Monday with the Dow gaining another 312.08 points (0.78%) to 40,524.79, the S&P up 42.61 points (0.79%) to 5,405.97, and the Nasdaq climbing 107.03 points (0.64%) to 16,831.48.
US futures were marginally lower early Tuesday, with the Dow down 0.07%, the S&P 0.04%, and the Nasdaq 0.02%.
Asian markets that had slumped on Friday bounced back strongly on Monday. The rally continued into Tuesday, with Japan’s Nikkei opening over 1% higher.
On Friday, Indian benchmarks closed with robust gains, mirroring the late-week recovery in US markets. The Nifty soared 429.40 points (1.92%) to settle at 22,828.55, while the Sensex climbed 1,310.11 points (1.77%) to end at 75,157.26. The Bank Nifty added 762.20 points (1.52%) to close at 51,002.35.
The midcap index advanced 1.85% (919.45 points) to reach 50,501.50, and the smallcap index surged 2.88% to 15,696.10.
Stocks across sectors rallied, with metals, pharma, auto, consumer durables, oil, healthcare, and financials seeing significant gains.
Market breadth was overwhelmingly positive. On the BSE, 3,084 stocks advanced while only 885 declined. At the NSE, 2,381 stocks ended higher, with 492 lower.
Thirtyfive stocks on the NSE hit 52-week highs, while only one touched a new low. As many as 160 stocks were locked in the upper circuit, with 23 in the lower circuit.
Foreign institutional investors were net sellers on Wednesday, offloading equities worth ₹2,519.03 crore in the cash segment, while domestic funds bought ₹3,759.27 crore worth of shares.
Despite high volatility last week, the Nifty and Sensex ended with minor weekly losses of 0.33% and 0.28% respectively, though the broader market mood remained optimistic.
Gold, which had spiked amid heightened tariff war fears, slipped briefly due to profit-booking but has resumed its upward trajectory. Even at its lowest, prices stayed above $3,200 per ounce. Spot gold touched a record $3,245.42 before the pullback.
Goldman Sachs now expects gold to hit $3,700 by year-end, revising its earlier March forecast of $3,300. In the event of a recession, prices could rise to $3,900—or even $4,500 under extraordinary conditions. Should the rupee-dollar exchange rate remain stable, gold could breach ₹1 lakh per sovereign.
As investor confidence in the US government, the dollar, and treasuries wanes—fuelled by Trump's erratic tariff policy—hedge funds and ultra-wealthy investors are pivoting towards gold. Gold ETFs have seen heavy inflows, while central banks in India, China and elsewhere continue to stockpile gold in tonnes.
Gold rose 12.8% in 2023 and soared 26.4% last year. So far this year, it’s up another 23.4%. In New York, spot gold closed Monday at $3,211.70 and opened Tuesday at $3,225.
In Kerala, sovereign gold rose from ₹65,800 on April 8 to a record ₹70,160 on April 12—a jump of ₹4,360 in just four days. On Monday, it dipped slightly by ₹120 to ₹70,040. Silver is hovering at $32.26.
In international holiday trade, rubber prices posted a marginal gain on Monday. Cocoa, which had rallied recently, fell 1.75% to $8,323.60. Palm oil and soybean prices rose.
The US dollar index stayed below 100 for a third straight session, closing at 99.64 after briefly dipping to 99.21. It edged up to 99.86 on Tuesday morning. The euro stood at $1.1334, and the pound at $1.3181.
US treasury yields fell significantly on Monday, with the 10-year yield dropping below 4.4%, and touching 4.35% on Tuesday. The belief that Trump may soften further on tariffs is influencing bond markets.
The rupee appreciated sharply on Friday, with the dollar falling 65 paise to ₹86.04. China’s yuan weakened from 7.29 to 7.35 per dollar.
Crude oil prices, after a choppy weekend, appear to be stabilising at higher levels. OPEC has warned that an escalation in the tariff war could hurt crude demand. Brent crude, which had approached $66, closed at $64.88 on Friday, and climbed to $65.17 on Tuesday morning. WTI was at $61.83, while Murban crude from the UAE rose to $66.19.
After recent volatility, cryptocurrencies are again on the rise. Bitcoin crossed $84,720, while Ethereum touched $1,625.
