Global Jitters Set to Dampen Indian Market Open: Tariffs, Q1 Earnings, and Gold in Focus

The Indian equity benchmarks, Sensex and Nifty 50, are poised for a cautious start to the week on Monday, July 14. A blend of mixed global signals and fresh geopolitical uncertainties is casting a shadow over investor sentiment, following a sharp decline in the domestic market on Friday.

Friday's Fallout: A Week Ends in the Red

Last Friday saw significant selling pressure on Indian bourses. The Sensex plummeted 690 points, or 0.83%, to close at 82,500.47, while the Nifty 50 shed 205 points, or 0.81%, ending the session at 25,149.85.

"Markets traded under pressure on Friday and lost over half a percent, dragged down by weak cues," noted Ajit Mishra, SVP, Research, Religare Broking Ltd. He highlighted that disappointing Q1 results from IT major TCS, coupled with profit-taking in heavyweight stocks across various sectors, fueled the downtrend. Barring defensive sectors like FMCG and Pharma, all key indices closed in negative territory, with IT, Auto, and Realty leading the decline. Broader market indices also felt the heat, each slipping by nearly a percent.

Global Forces at Play: What's Shifting Overnight

The subdued opening expected today can be attributed to several key global developments:

Asian Markets React to Trump's Tariff Threats:

Asia-Pacific markets kicked off the week with a mixed performance as investors digested U.S. President Donald Trump's weekend announcement of 30% tariffs on imports from the European Union and Mexico. Japan's Nikkei 225 dipped 0.33%, and the broader Topix index saw a marginal decline of 0.21%. Conversely, Chinese and Hong Kong markets registered slight gains despite the broader regional uncertainty, with the Hang Seng Index up 0.14% and China's CSI 300 rising 0.16%. South Korea's Kospi gained 0.22%, while the smaller-cap focused Kosdaq edged up 0.19%.

Gift Nifty Hints at Negative Opening:

The Gift Nifty, an early indicator of Indian market sentiment, was trading around the 25,179 level, signaling a discount of approximately 12.5 points from the Nifty futures' previous close. This suggests a negative start for India's benchmark indices.

Wall Street Futures Extend Losses:

Futures on Wall Street are mirroring Friday's decline, as investors engage in profit-booking amid escalating trade uncertainties. Dow futures are down by 200 points, while S&P 500 and Nasdaq futures have slipped 30 and 100 points, respectively.

Trump's Tariff Ultimatum:

Over the weekend, President Trump reiterated his warning that the European Union and Mexico would face a substantial 30% tariff on their goods if new trade agreements are not reached by August 1. In response, the EU has temporarily halted its planned countermeasures, allowing room for negotiations. Mexico, meanwhile, remains optimistic about avoiding the tariffs, citing ongoing discussions with the Trump administration. Goods complying with the USMCA agreement are expected to be exempt from these additional duties.

Q1 Earnings Season Kicks Off:

The June quarter 2025 earnings season is now in full swing, with a packed schedule of results from major Indian corporations. Investors will keenly watch announcements from bellwether companies such as HCL Tech, Tech Mahindra, Axis Bank, ICICI Bank, Wipro, JSW Steel, L&T Finance, and HDFC Bank, among others, to gauge corporate health and future outlook.

Gold Shines as Safe Haven:

Gold prices surged to a three-week high on Monday, demonstrating its traditional role as a safe-haven asset. This uptick is directly linked to the increased demand stemming from U.S. President Donald Trump's tariff threats against the European Union and Mexico. Spot gold rose 0.2% to $3,361.19 per ounce, hitting its highest level since June 23, while U.S. gold futures advanced 0.4% to $3,376.

Crude Oil's Mixed Signals:

Oil prices saw a modest increase on Monday, building on Friday's more than 2% gains. The market is closely monitoring potential new U.S. sanctions on Russia, which could impact global supply. However, this upward movement is being tempered by rising Saudi production and lingering uncertainty surrounding the tariff situation. Brent crude futures inched up by 8 cents to $70.44 a barrel, and U.S. West Texas Intermediate (WTI) crude rose 5 cents to $68.50.

U.S. Dollar Strengthens:

The U.S. Dollar gained 0.3% following Trump's tariff announcement, with the US Dollar index returning to the 98 mark. A stronger dollar can often exert pressure on emerging market currencies like the Indian Rupee.

As the trading day unfolds, market participants will be closely scrutinizing these global and domestic factors to navigate the volatile landscape.