Market Sentiments Soar as US Tariffs Struck Down, But Caution Remains

The domestic stock markets experienced an optimistic surge at Monday's opening bell after the US repealed Trump-era tariffs, delivering a boost to investor confidence. Yet, analysts remain cautious, highlighting potential volatility due to ongoing tariff disputes and geopolitical uncertainties.

The Nifty 50 index commenced trading at 25,678.40, climbing by 107.15 points or 0.42%, while the BSE Sensex saw an initial rise of 92.12 points or 0.11% to 82,906.83. Market experts pointed out that while the immediate market response was favorable following the tariff decision, apprehensions linger due to new tariff pronouncements and global instability.

Ajay Bagga, an expert in banking and markets, informed ANI that the Indian stock futures rallied last Friday following the tariff repeal but warned that subsequent announcements of 10% and 15% global tariffs position India competitively with Asian contenders. He noted the surrender of some Friday evening gains and forecasted a volatile week with impending monthly expiries and no supporting market catalysts, emphasizing Iranian negotiations as a crucial factor affecting market sentiment.

The recent tariff-related developments have been pivotal for global market dynamics. The US Supreme Court's ruling against the presidential authority to impose tariffs had led to a relief rally in these markets. The commodities market saw gold prices rise 2% amid continued tariff uncertainties, with gold at Rs 159,908 per 10 gm, and silver escalating 6% to Rs 268,120 per kg due to increased demand for secure investment options.

Sector-wise, most NSE indices opened positively, except for Nifty IT. Nifty Metal advanced 1%, Nifty Auto gained 0.46%, and Nifty Pharma increased by 0.47%. Nifty PSU Bank, Realty, and Consumer Durables sectors all reported moderate gains. Meanwhile, geopolitical tensions remain high with ongoing issues around Iran.

According to Bagga, imminent attacks involving Iran may unfold within weeks unless Iran concedes to demands, facing potential aggression from Israel. Alternatively, refusal could lead to immediate confrontation causing substantial conflict with Israel and US bases. A potential face-saving resolution hinges on the US Congress' stance on war declarations, offering a path for de-escalation if Trump chooses to withdraw amid congressional approval or lack thereof.

The sentiment uplift was mirrored in other Asian markets, with Singapore's Straits Times up 0.28%, Hong Kong's Hang Seng index climbing 2.21%, Taiwan's Weighted Index up 1.41%, and South Korea's KOSPI index rising 0.31%. Japan's markets were closed for a national holiday.