On Friday, Indian stock markets experienced a notable surge, driven by Donald Trump’s recent announcement to halt reciprocal tariffs for 90 days on several countries, including India. This positive development led to the Sensex closing at 75,157.26 points, an increase of 1,310.11 points or 1.77%. The Nifty 50 also saw impressive gains, finishing at 22,828.55 points, up 429.40 points or 1.92%. Key sectors like metal, consumer durables, and oil and gas performed exceptionally well, highlighting the market’s robust recovery.

Tariff Pause Sparks Market Optimism

The White House recently issued executive orders suspending additional tariffs on India for a three-month period, lasting until July 9. This decision comes on the heels of Trump’s imposition of tariffs on around 60 countries on April 2, which included steep charges on Indian exports such as shrimp and steel. Market analysts noted that the Nifty 50 had hit an intra-week low of 21,743.65 points before bouncing back strongly.

• Key Market Stats:
  • Sensex: 75,157.26 (+1.77%)
  • Nifty 50: 22,828.55 (+1.92%)
  • Leading sectors: Metal, Consumer Durables, Oil & Gas
  • Intra-week low for Nifty 50: 21,743.65

Global Tensions and Market Reactions

Tensions between the U.S. and China have intensified, with both countries imposing tariffs on each other’s goods. Following Trump’s announcement, China retaliated with tariffs of up to 125% on U.S. products, prompting further escalations from the U.S. This backdrop of trade conflicts initially weighed heavily on global markets, yet the recent tariff reprieve provided much-needed relief.

In the bond market, the yield on U.S. 10-year Treasuries rose by 11.55%, reaching 4.462%, while the U.S. dollar index fell 2.72%, dipping below the 100 mark.

Expert Insights on Market Movements

Puneet Singhania, Director at Master Trust Group, indicated that the upcoming week may bring volatility to both global and Indian markets due to ongoing trade disputes. He highlighted that the release of WPI data and inflation figures, along with updates on foreign exchange reserves and vehicle sales, will be closely monitored. Significant economic data from the U.S., U.K., and China is also anticipated.

Positive Market Outlook

According to Dharmesh Shah, Vice President at ICICI Securities, the Nifty 50 has made a strong recovery following the tariff pause announcement. Despite a gap down opening, it managed to rebound 5% from the week’s low and ended the week around 22,900. Key observations include:

• FMCG stocks outperformed, while realty and metal sectors lagged.
• The Nifty 50 has successfully defended the crucial support level of 21,900, indicating a potential base formation for further gains.
• Historical patterns suggest that buying during such corrections typically yields rewarding returns, with an average of 23% over the next year.

Recommendations for Investors

In light of the current market dynamics, Dharmesh Shah recommends considering Bharat Dynamics as a strong investment opportunity. He suggests entering at a price range of ₹1,270-1,320, with a target set at ₹1,455 and a stop loss at ₹1,207.

Conclusion

As the markets navigate through this period of uncertainty, investors are encouraged to focus on quality stocks, particularly as we approach the Q4 earnings season. Keeping an eye on global economic indicators and domestic data will be crucial for making informed investment decisions in the coming weeks.

By staying informed and adaptable, investors can position themselves to capitalize on potential market movements and opportunities.