Markets opened today under pressure after US President Donald Trump announced a 25 percent tariff, along with a punitive levy, on Indian imports. The move, harsher than anticipated, comes as a shock to India, which sends 18 percent of its exports directly to the US. An additional 4–5 percent is shipped to third countries that then reprocess and re-export to the US.
Trump’s announcement also included a strategic energy cooperation agreement with Pakistan, a further blow to India.
Talks are still ongoing between India and the US on trade. If no breakthrough is reached within hours, Indian exports to the US could come to a halt from tomorrow.
The US is the biggest export market for Indian goods such as engineering products, electronics, textiles, pharmaceuticals, chemicals, gems and jewellery, agricultural produce, marine items, and leather products. Any disruption would lead to significant losses.
Trump is also reportedly demanding that India halt defence and energy purchases from Russia, reduce or eliminate import duties on US farm and dairy goods, allow imports of genetically modified products, and withdraw data localisation rules for tech companies. These demands are politically sensitive and unlikely to be conceded easily.
Markets are hoping for a government announcement today that could reassure investors. In its absence, a sharp fall is likely.
In the derivatives market, Gift Nifty closed Wednesday night at 24,655.00. It opened at 24,711 in the morning, briefly fell to 24,650, and later hovered around 24,675—indicating a weak start for Indian equities.
European markets closed mixed on Wednesday. The Eurozone GDP grew by just 0.1 percent in the second quarter, slightly better than expectations of zero growth, although well below the 0.6 percent expansion in the first quarter. Among major European stocks, Novo Nordisk fell further after Tuesday’s steep decline. HSBC posted weaker-than-expected results but announced a $3 billion share buyback. Adidas, Porsche, L’Oréal, and BASF warned of profit headwinds from trade disruptions.
US markets also ended mixed. Early gains faded after the US Federal Reserve left interest rates unchanged, despite persistent inflationary pressures. Fed Chair Jerome Powell said a rate cut could be considered in September, though only two members of the Fed committee favoured such a move.
Second-quarter US GDP grew by 3 percent, above forecasts of 2.3–2.4 percent, thanks to a 30.3 percent decline in imports amid tariff concerns. In contrast, GDP had shrunk 0.5 percent in the first quarter. However, consumer spending growth slowed to 1.4 percent.
The Dow Jones fell 171.71 points (0.38 percent) to 44,461.28. The S&P 500 closed 7.96 points lower (0.12 percent) at 6,362.90. The Nasdaq Composite gained 31.38 points (0.15 percent) to end at 21,129.67.
After-hours earnings from tech giants boosted futures, with the Dow, S&P 500 and Nasdaq up 0.22 percent, 0.84 percent and 1.23 percent respectively.
Meta Platforms reported stronger-than-expected earnings and revenue, sending its shares up 11 percent in after-hours trading. Microsoft posted 18 percent revenue growth, raised its operating margin to 46.6 percent, and saw its shares surge 9 percent. If gains hold, Microsoft could become the second company after Nvidia with a $4 trillion market capitalisation.
In contrast to the 25 percent duty on Indian goods, Trump reduced South Korea’s tariffs to 15 percent.
Asian markets opened mixed. Japanese and South Korean indices rose about 0.75 percent, while Hong Kong and Chinese markets were weak.
Uncertainty over the US-India trade talks left Indian markets directionless on Wednesday. Major indices posted marginal gains, but sector-specific declines and losses in mid cap and small cap stocks weighed on sentiment.
The Nifty closed up 33.95 points (0.14 percent) at 24,855.05. The Sensex added 143.91 points (0.18 percent) to close at 81,481.86. Bank Nifty slipped 71.30 points (0.13 percent) to 56,150.70. The Nifty Midcap 100 fell 42.60 points (0.07 percent) to 57,942.25, while the Nifty Smallcap 100 declined 94.60 points (0.52 percent) to 18,156.85.
The broader BSE market breadth was negative, with 1,992 stocks advancing and 2,023 declining. On the NSE, 1,507 stocks rose while 1,463 fell. As many as 85 stocks touched 52-week highs, while 35 hit new lows.
Foreign institutional investors sold a net ₹850.04 crore in the cash market on Wednesday, while domestic institutions bought ₹1,829.11 crore worth of shares.
The Nifty is expected to find support at 24,710 and 24,795, with resistance at 24,895 and 24,975.
Hindustan Unilever, Maruti Suzuki, Coal India, Eicher Motors, Sun Pharma, Adani Enterprises, PB Fintech, TVS Motor, and Dabur are set to release quarterly results today.
Tata Steel’s first-quarter profit more than doubled, while Hyundai Motor’s Q1 profit fell 8 percent due to lower sales. Indigo reported a 20 percent drop in quarterly profit, impacted by airspace restrictions and the regional conflict. Mahindra & Mahindra’s Q1 profit rose 24 percent on a 22.76 percent increase in sales. Birla Corporation, part of the MP Birla Group, reported a 267 percent jump in net profit and 12 percent rise in revenue.
Gold dropped below the crucial $3,300 mark amid dollar strength and the Fed’s hawkish stance. It closed at $3,276.30 per ounce on Wednesday, down $51. It recovered slightly to $3,287 in early Thursday trade.
In Kerala, gold prices rose by ₹480 per sovereign to ₹73,680, driven by the stronger dollar. If the dollar continues to climb, the local price may remain firm despite international weakness.
Silver fell 3 percent to $37.07 per ounce on Wednesday, disappointing bulls who were eyeing a move towards $40.
President Trump signed an order imposing a 50 percent tariff on copper imports into the US, triggering panic in the American metals market. Copper prices fell 20 percent overnight.
On Wednesday, copper dropped 0.35 percent to $9,699 per tonne, while aluminium lost 3.52 percent to $2,612.19. Most base metals fell, with the exception of zinc and tin, which rose.
Rubber gained 0.94 percent to 171.90 cents per kilogram in global trade. Cocoa edged down 0.16 percent to $8,207 per tonne. Coffee lost 1.26 percent, while tea was unchanged. Palm oil rose 0.02 percent.
The US dollar index rose nearly 1 percent to close at 99.82 and hovered near 99.79 this morning. In currency markets, the euro weakened to $1.143 and the pound to $1.325. The yen slipped to 149.27 per dollar. US 10-year bond yields rose to 4.364 percent as prices dipped slightly.
The rupee plunged sharply, breaching the 87 mark against the dollar. It briefly touched 87.80 before closing at 87.42—a five-month low. The tariff hike, likely export declines, and fears of widening trade and current account deficits have hurt the rupee. Despite RBI intervention, the slide could continue. The Chinese yuan held at 7.18 per dollar.
Crude oil prices continued to rise, supported by concerns over new sanctions on Iran. Brent closed at $73.24 per barrel on Wednesday and traded at $73.15 this morning. WTI was at $70.05 and Murban at $76.00. Natural gas rose 1 percent.
Bitcoin fell but held above $118,300. Ether traded at $3,840. Analysts see further upside potential for Ether.
