New Delhi: Domestic benchmark equity indices may see a positive trading sentiment on Friday thanks to a spectacular rally in world markets after the US President Donald Trump announced to put tariff hikes on hold for 90 days, excluding China from the reprieve.
Indian stock markets were closed on Thursday for Shri Mahavir Jayanti.
Trump has declared a three-month pause on reciprocal tariffs on non-retaliating countries marking a rather unexpected U-turn after record high levies he imposed led to global stock market meltdown.
World markets were in a euphoric state following Trump’s decision to put his sharp tariff hikes on hold for 90 days.
In Asian markets, Tokyo’s Nikkei 225 index jumped 9.13 per cent, South Korea’s Kospi surged 6.60 per cent. Hong Kong’s Hang Seng went up 2.06 per cent and Shanghai SSE Composite index climbed 1.16 per cent.
European markets also rejoiced the announcement and were trading sharply higher.
US markets were on fire on Wednesday, ending with stupendous gains. The Nasdaq composite surged 12.16 per cent, S&P 500 zoomed 9.52 per cent and Dow Jones Industrial Average jumped 7.87 per cent.
“The Trump announcement announcing a 90-day pause is a welcome move which reflected positively in other Asian markets today with a positive 5-8 per cent gap-up. Indian markets too would see a similar kind of 3-5 per cent gap-up opening on Friday, as we believe any negative action against China with a tariff increasing to 125 per cent would eventually benefit India the most,” Rakeshh Mehta, Chairman, Mehta Equities-Mehta Group, said.
With the 90-day pause, the markets are likely to get a breather, lifting investors’ mood, with the government getting more time to work on the MEGA deal with the US, he added.
Trump has, however, made it clear that he would raise tariffs on China to a whopping 125 per cent after Beijing vowed a fresh round of retaliation. For other countries, the rates will revert to the baseline 10 per cent. After the US President unveiled reciprocal tariffs on about 60 countries, including India, last week, both benchmark indices have faced the heat of uncertainities regarding the likely scenario of a global trade war.
Since April 2, the 30-share BSE benchmark Sensex has lost 2,770.29 points, or 3.61 per cent, and the NSE Nifty slumped 933.2 points, or 3.99 per cent.
Investors’ wealth have since eroded Rs 19,15,762.38 crore to Rs 3,93,82,333.22 crore ($4.55 trillion).