The US has finalised a trade agreement with Japan, and a similar deal with the European Union is expected to be announced on Wednesday. The developments have brought relief to global markets.
US President Donald Trump, who had earlier threatened to impose a 25 percent tariff on Japanese imports, confirmed that the rate would now be reduced to 15 percent. Tariffs on Japanese automobiles, which had been under pressure, will also be lowered from 25 percent to 15 percent. The tariff cuts triggered sharp gains across global stock markets. Trump said Japan would start importing rice and cars from the US as part of the agreement. However, he provided no specific details about the EU deal.
There has been no announcement yet regarding a US-India trade agreement. However, the US-Japan deal has raised hopes in New Delhi. Officials expect the 26 percent tariff on Indian goods to be brought closer to 15 percent. India, however, may need to make concessions in sectors like agriculture and automobiles.
In the derivatives market, Gift Nifty closed at 25,140.00 on Tuesday night and climbed to 25,171 this morning. This indicates a positive opening for the Indian market today.
European markets ended lower on Tuesday. Germany’s benchmark index dropped more than one percent.
US markets closed mixed after a volatile session. Profit booking in tech stocks pulled the Nasdaq index off record highs. Chipmaker stocks declined, while Lockheed Martin fell following a weak Q2 profit. Despite no fresh updates, department store chain Kohl’s surged 38 percent. Among S&P 500 companies that have reported results so far, 85 percent have exceeded profit expectations.
On Tuesday, the Dow Jones Industrial Average rose 179.37 points (0.40 percent) to close at 44,502.44. The S&P 500 gained 4.02 points (0.06 percent) to end at a record 6,309.62. The Nasdaq Composite dropped 81.49 points (0.39 percent) to 20,892.69.
US futures were trading higher this morning, with the Dow up 0.19 percent, S&P 500 up 0.18 percent, and Nasdaq up 0.06 percent.
Asian markets rallied in response to the US-Japan deal. Japan’s Nikkei surged by 2.5 percent, while shares of Japanese automakers rose as much as 16 percent. South Korean and Australian markets also advanced. Korean auto stocks climbed up to 8 percent.
Despite Monday’s gains, Indian markets failed to maintain momentum on Tuesday. After high volatility, key indices closed with marginal losses, while broader markets declined further. All major sectors ended in the red, led by PSU banks, real estate, and pharmaceuticals.
Eternal (Zomato), which surged 7.5 percent on Monday, rallied another 10.32 percent, pushing its market capitalisation close to ₹3 lakh crore. The performance was driven by strong numbers from its quick-commerce arm, Blinkit. Swiggy followed with a 5.9 percent rise. Info Edge, which holds a 5 percent stake in Eternal, gained 5 percent.
Tilaknagar Industries jumped 14 percent after reports that it was in talks to acquire the Imperial Blue brand from Zee Gram.
SML Isuzu rose 10 percent after reporting a sharp increase in revenue and a 44.4 percent jump in net profit. Margins also improved. The company’s Japanese promoters are set to transfer their 59 percent stake to Mahindra & Mahindra by December. The open offer, priced at ₹1,554.60 per share, is now trading at a 138 percent premium.
Zee Entertainment fell 6.23 percent despite higher Q1 profits due to a sharp decline in ad revenues.
Reliance Industries, which had dropped 3 percent on Monday after Q1 results, lost another 1.04 percent on Tuesday. The stock is now down 9 percent from its all-time high. Its market cap has dropped by ₹1 lakh crore in two days. Foreign institutional investors were net sellers in the cash market.
Nifty fell 29.80 points (0.12 percent) to close at 25,060.90. Sensex slipped 13.53 points (0.02 percent) to end at 82,186.81. Bank Nifty dropped 196.75 points (0.35 percent) to 56,756.00. The Nifty Midcap 100 index fell 364.95 points (0.61 percent) to 59,103.40, while the Smallcap 100 index declined 64.95 points (0.34 percent) to 18,893.35.
The market breadth remained negative. On BSE, 1,728 stocks advanced while 2,300 declined. On NSE, 1,279 shares rose while 1,673 declined.
On NSE, 75 stocks hit 52-week highs, while 24 touched new lows. Seven stocks hit upper circuits, and five hit lower circuits.
Foreign investors sold shares worth ₹3,548.92 crore in the cash segment. Domestic funds bought ₹5,239.77 crore worth of equities.
Investor expectations failed to materialise as markets could not extend their gains. Analysts believe Nifty needs to close decisively above 25,250 for a sustained rally. Until then, 24,900 is seen as support.
For Wednesday, Nifty has support at 25,035 and 24,950, with resistance at 25,150 and 25,240.
Gold continued its upward rally. Weakness in the US dollar and uncertainties surrounding global trade have pushed large investors toward gold. Gold climbed $34.70 on Tuesday to close at $3,432.40 per ounce. It slipped slightly to $3,423 this morning after the US-Japan trade deal was announced.
In Kerala, gold prices rose ₹940 on Tuesday to ₹74,280 per sovereign. With global prices rising, the state’s all-time high of ₹74,560 may be breached today.
Silver climbed to $39.40 before closing at $39.23. Analysts who had earlier predicted gold would hit $42 per ounce by 2026 are now questioning whether that level may be reached by Q4 this year.
In international markets, rubber gained 0.95 percent to 170.40 cents per kg. Cocoa fell 0.33 percent to $8,129 per tonne. Coffee rose 1.51 percent, while tea prices declined again. Palm oil dropped 0.26 percent.
The US dollar index remained under pressure, closing at 97.39 on Tuesday and edging slightly up to 97.41 this morning.
In currency markets, the euro rose to $1.1738, and the pound strengthened to $1.3522. The Japanese yen appreciated to 146.65 per dollar, with analysts expecting further gains following tariff relief.
US 10-year Treasury prices rose, pushing yields down to 4.358 percent.
The Indian rupee, which had opened stronger, reversed gains to close weaker by eight paise at 86.37 per dollar.
The Chinese yuan rose to 7.17 per dollar.
News of the US-Japan agreement pushed crude oil prices higher. Brent crude rose to $68.94. This morning, WTI crude was trading at $66.21, while Murban crude stood at $71.24. Natural gas prices also edged up.
Cryptocurrencies were mixed. Bitcoin was trading near $119,600, while Ether was below $3,730.
