Tariff uncertainty and Jane Street fraud weigh on markets; crude prices ease, Asian indices slip
Growing uncertainty around US trade policy, mounting fears over market manipulation by global trading giant Jane Street, and continued weakness in crude oil prices dragged Asian markets lower on Monday.
Markets were rattled as US President Donald Trump doubled down on his hardline tariff stance. He reiterated that countries unwilling to align their trade policies with US interests would face punitive duties. The only relief came from the announcement that new tariff implementation would be deferred to August 1.
Talks between India and the US remain stuck, with Trump reportedly rejecting India's demands to shield its agricultural and dairy sectors and restrict genetically modified imports. According to Indian sources, the US is insisting on duty-free access for all its exports to India while seeking to impose a 10 percent levy on Indian goods. Fresh negotiations are possible before August, but Trump may announce new tariffs on India unilaterally before then.
Trump and his top trade officials have indicated that official tariff letters will begin reaching various countries this week. The first batch of 12 such letters was signed last Friday, though the recipients were not disclosed.
Investor sentiment was further dented by the explosive findings in SEBI's interim order against US-based trading firm Jane Street. The company is accused of engineering expiry-day trades to manipulate index movements through coordinated options, futures and cash market positions. Sebi estimates Jane Street reaped illegal profits exceeding ₹36,000 crore. A penalty of ₹4,500 crore has been imposed, and bank accounts have been frozen.
Stocks of entities linked to Jane Street, including Angel One Broking, depository CDSL, and Nuvama Wealth Management, fell sharply on Friday. The BSE also saw a decline. More revelations could trigger further declines.
Jane Street and other foreign investors reportedly deployed high-frequency algorithmic trading strategies, making it nearly impossible for retail investors to compete. These players often use their deep insights into derivatives to profit from price dislocations in the cash and futures markets, frequently at the expense of ordinary investors. The FIR claims Jane Street made more than ₹700 crore in profits on a single day.
In a relief for energy-importing nations, crude prices extended their decline. Brent crude slipped below $68 a barrel as OPEC+ agreed over the weekend to increase output, raising fears of oversupply. Slowing global demand, worsened by the US tariff threat, also weighed on prices. Brent was last trading at $68.30, down $0.50, while WTI was at $65.60.
Indian equity benchmarks ended marginally higher on Friday following sharp intraday swings. Lingering concerns over the India-US trade deal capped gains. There were no concrete updates following a delegation’s return from Washington. Commerce Minister Piyush Goyal stated India would not be pressured into any deal that undermines its interests but stopped short of providing a roadmap. Markets interpreted this as a sign that an interim agreement is unlikely.
Analysts said the US tariff direction and India-US trade talks will drive market sentiment this week. Technically, Nifty reclaimed support at 25,300. Sustaining above this level could open the door to 25,700. Key support levels are 25,370 and 25,330, while resistance is seen at 25,475 and 25,560.
European markets ended lower on Friday as Trump’s tariff plans stoked uncertainty. French liquor firms were rattled after a 34.5 per cent anti-dumping duty was proposed. Some high-end brands like Rémy Cointreau may be shielded by fixed pricing contracts.
Germany’s factory orders fell 1.4 percent in May, fuelling concerns about the country’s growth trajectory.
US markets were shut on Friday for Independence Day. US futures were trading lower on Monday — Dow down 0.22 percent, S&P 500 off 0.36 percent, and Nasdaq weaker by 0.40 percent.
Asian indices mirrored the weak global cues. Japan’s Nikkei fell 0.55 percent, South Korea’s Kospi declined 0.50 percent, and Chinese and Hong Kong markets opened lower.
Gold prices rebounded slightly on Friday after Thursday’s fall, triggered by signals that US interest rates may stay elevated for longer. Gold closed at $3,337.93 per ounce but slipped to $3,318 in early trade on Monday.
In Kerala, gold dropped ₹480 per sovereign on Friday to ₹72,400, before inching up ₹80 on Saturday to ₹72,480.
Silver closed higher at $36.94 per ounce before softening. Industrial metals declined — copper fell 1.48 per cent to $9,970.50/tonne, aluminium dropped 0.83 per cent to $2,590, and nickel, zinc and tin also saw losses.
Natural rubber prices slipped 0.83 per cent to $1.639/kg on international markets. Cocoa held steady near $7,950/tonne. Coffee and tea prices were largely unchanged. Palm oil fell 0.76 per cent.
The US dollar index ended slightly lower on Friday at 96.92, slipping further to 96.70 in early trade. The euro rose to $1.1782, and the pound firmed to $1.365 after a dip. The yen appreciated to 144.38 per dollar.
US 10-year Treasury yields fell to 4.324 per cent as prices gained. The Indian rupee ended Friday weaker at 85.39 per dollar, down 8 paise. China’s yuan remained steady at 7.17 per dollar.
