Markets: Tariff pause, trade negotiations push equity markets up
Virendra Pandit
New Delhi: With US President Donald Trump pausing his steep ‘reciprocal tariffs’ on all imports for 90 days and India’s ongoing trade negotiations showing positivity, benchmark Sensex and Nifty indices rallied nearly 2 percent on Friday as metal stocks shone, the media reported.
The BSE Sensex surged 1,620 points or 2.2 percent to hit intraday high of 75,467 level. On the NSE, the Nifty index soared 525 points or 2.3 percent to the day’s high of 22,924. As trading ended, Senses was up 1.77 percent, or 1310.11 points, to close at 75157.26. Nifty50 ended 1.92 percent up, or 429.40 points, to close at 22828.55.
Although the two benchmark indices ended in the green, gains remained limited by the ongoing US-China trade tensions.
On the BSE, of the 4,079 stocks traded, 3,107 advanced, 853 declined, and 119 remained unchanged. A total of 66 stocks hit a 52-week high, while 41 touched a 52-week low. As many as 331 stocks hit their upper circuit and 142 stocks hit the lower circuit. On the NSE, all sectoral indices closed in the green, led by metal stocks, which jumped over 4 percent.
In the broader markets, the Nifty MidCap index gained 1.85 percent and the Nifty SmallCap index 2.87 percent.
Market experts said the stock market rally was because of an improved market sentiment where investors were relieved that India was one of the least impacted countries in the trade war. As of now, China has been slapped with reciprocal tariffs of 145 percent with immediate effect, whereas India has been exempted from the 26-percent tariffs for 90 days. On its part, China has also slapped 125 percent tariff on imports from the US.
These reasons, coupled with the likely US-India negotiations bearing fruits soon have cheered investors as they anticipate India to benefit from ‘China+1’ theme.
Meanwhile, according to a media report quoting a trade official, India and the United States have finalised ‘terms of reference’ over the first segment of a bilateral trade deal.
There was a possibility of a ‘win-win shape and form’ to the deal in the next 90 days. India is trying to finalise the trade deal with the US by the fall of this year, aiming to more than double the bilateral trade to USD 500 billion by 2030 from the current about USD 191 billion. “The work has started. India is far ahead of other countries in negotiating a trade deal,” the official added.
On Friday, Union Commerce and Industry Minister Piyush Goyal said talks with the US are progressing with an ‘India First’ approach, and the government is taking steps to safeguard national interests.
Also, speaking at a technology summit on Friday, External Affairs Minister S. Jaishankar said that India has geared up for a “very high degree of urgency” in terms of trade pact with the US.
“This time around, we are certainly geared up for a very high degree of urgency. We see a window here and we want to seize that window. Our trade teams are really charged up. This is normally a complaint which in the past was made about us, that we are the guys slowing it down. Today, it is the other way around. We are trying to communicate that urgency on all three accounts,” Jaishankar said.
This development comes amid President Trump’s global threats of reciprocal tariffs. Just days after announcing the tariff rates, he temporarily paused their implementation for 90 days for several trade partners, including India.
Finalising the first tranche of the deal may offer some relief to Indian exporters, even if the US decides to continue with the 26 percent reciprocal tariffs after the three-month pause.
