Post Session: Quick Review

Indian equity markets rebounded strongly on Friday, with the Nifty crossing the 22,800 mark and the Sensex surging over 1,300 points after the US announced suspension of additional tariffs on India for 90 days until July 9 this year. Indices made a gap-opening and traded near their highest points throughout the trading session despite persistent global trade uncertainties.

Some of the important factors in trade:

Trump pauses new tariffs for 90 days: Sentiments remained optimistic after U.S. President Donald Trump announced a tariff U-turn, dropping the new reciprocal tariff rates on imports from most countries for 90 days.

India's exports cross $820 billion in 2024-25: Some support came as commerce ministry said that the country's goods and services exports have crossed $820 billion in 2024-25, marking a nearly 6 per cent increase over the previous fiscal year despite global economic uncertainties. 

US tariffs on China to benefit Indian exports: Traders took support with the Global Trade Research Initiative (GTRI) stated that imposition of steep 125 per cent tariffs on China by the US could help Indian products from sectors such as textiles, leather, engineering, and electronics become more competitive in America. 

Global front: European markets were trading mostly in red as investors are worried that the escalating trade tensions between the U.S. and China could significantly impede global economic growth. Asian markets ended in mixed as Malaysia's industrial output expanded at the slowest pace in the current sequence of growth that began in January 2024, and retail sales growth eased notably in February. 

The BSE Sensex ended at 75157.26, up by 1310.11 points or 1.77% after trading in a range of 74762.84 and 75467.33. There were 28 stocks advancing against 2 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.84%, while Small cap index up by 3.04%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 4.29%, Basic Materials up by 3.40%, Consumer Durables up by 2.92%, Utilities up by 2.76% and Power up by 2.64%, while there were no losing sectoral indices on the BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 4.91%, Power Grid up by 3.72%, NTPC up by 3.21%, Reliance Industries up by 2.84% and Adani Ports and Special Economic Zone up by 2.81%. On the flip side, Asian Paints down by 0.76% and TCS down by 0.43% were the few losers. (Provisional)

Meanwhile, amid looming higher US reciprocal tariff threats, Moody's Analytics in its report titled 'APAC Outlook: U.S. Versus Them' has revised India's Gross Domestic Product (GDP) growth forecast to 6.1 per cent for 2025 from 6.4 per cent in its March baseline. It said the US is one of India's largest trading partners, so a 26 per cent tariff hovering over imports of Indian goods will heavily impede the trade balance. It said gems and jewellery, medical devices, and textile industries will be among the worst hit. 

Regardless, it expects overall growth to be relatively insulated from the shock since external demand makes up a relatively small portion of GDP. Given headline inflation has been easing at a healthy pace, it expects the Reserve Bank of India to lower interest rates, most likely in the form of 25-basis point cuts that take the policy rate to 5.75 per cent by the end of the year. This, paired with tax incentives announced earlier this year, should help boost the domestic economy and dampen the shock of the tariffs on overall growth relative to other vulnerable economies.

Moody's Analytics said uncertainty is palpable, with tumbling and volatile equity markets headlining financial market turbulence. It said the negative and pervasive impact of a sustained rise in uncertainty cannot be understated. Household and business sentiment is crumbling, and if the calamity continues, monetary policy easing that was supposed to characterise 2025 will lose some of its potency. Also, households won't want to spend more when the environment is so uncertain, regardless of stronger purchasing power, and businesses will hold back on additional investment as they navigate chaos. As tariffs increase the cost and complexity of trade, they weaken global growth prospects.

The CNX Nifty ended at 22828.55, up by 429.40 points or 1.92% after trading in a range of 22695.40 and 22923.90. There were 47 stocks advancing against 3 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 6.44%, Tata Steel up by 4.91%, JSW Steel up by 4.73%, Coal India up by 4.67% and JIO Financial Serv. up by 4.12%. On the flip side, Apollo Hospital down by 0.78%, Asian Paints down by 0.73% and TCS down by 0.47% were the few losers. (Provisional)

European markets were trading mostly in red; Germany’s DAX lost 181.64 points or 0.88% to 20,381.09 and France’s CAC fell 23.36 points or 0.33% to 7,102.66, while UK’s FTSE 100 increased 34.82 points or 0.44% to 7,948.07.

Asian markets settled mixed on Friday tracking Wall Street’s overnight fall amid an intensifying trade conflict between the United States and China after the White House confirmed that the cumulative tariff rate on China would actually total 145%. Chinese and Hong Kong shares gained as market participants awaited the outcome of a Thursday meeting planned by China's top leaders to discuss additional economic stimulus to counter the impact of an escalating trade war. Japanese shares declined as a stronger yen hurt export-related shares. Meanwhile, market participants were closely watching for further insights into the Fed’s monetary policy outlook ahead of the US producer price report later today.