Domestic benchmark equity indices may see positive trading sentiment on Friday thanks to a spectacular rally in world markets after US President Donald Trump announced a 90-day tariff pause, excluding China from the reprieve.
Indian stock markets were closed on Thursday for Shri Mahavir Jayanti.
Trump declared a three-month pause on reciprocal tariffs on non-retaliating countries, marking a rather unexpected U-turn after the record-high levies he imposed led to a global stock market meltdown.
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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%, South Korea's Kospi surged 6.60%. Hong Kong's Hang Seng went up 2.06% and Shanghai SSE Composite index climbed 1.16%.
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%, S&P 500 zoomed 9.52%, and Dow Jones Industrial Average jumped 7.87%.
"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% gap-up. Indian markets too would see a similar kind of 3-5% gap-up opening on Friday, as we believe any negative action against China with a tariff increase to 125% would eventually benefit India the most," said Rakesh Mehta, Chairman of Mehta Equities-Mehta Group.
With the 90-day pause, the markets are likely to get a breather, lifting investors' moods, 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% after Beijing vowed a fresh round of retaliation. For other countries, the rates will revert to the baseline 10%.
After US President Trump's unveiling of reciprocal tariffs on about 60 countries, including India, last week, both benchmark indices have faced the heat of uncertainties 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%, and the NSE Nifty slumped 933.2 points, or 3.99%.
Investors' wealth has since eroded Rs 19,15,762.38 crore to Rs 3,93,82,333.22 crore ($4.55 trillion).
"Indian markets will open with a sharp gap up on Friday. Nifty implied open is indicating a gap up of around 700 points. Short-covering can take the markets higher. IT stocks, which were sharply down during this downturn, will bounce back sharply since recession fears have receded. Pharma stocks, which were depressed on fears of tariffs, will rise sharply. Leading large caps in banking and financials will rally. It is likely to be an across-the-board buying. FIIs will be forced to turn buyers in India soon since Chinese stocks will continue to be under pressure," said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.
"Recent developments in US trade policy under President Donald Trump have led to significant fluctuations in global markets, including those in India. President Trump declared a 90-day pause on most of these tariffs, excluding China, which faced an increased tariff of 125%. This decision was aimed at alleviating global economic tensions and was met with a positive response from international markets. Asian markets rebounded as investor sentiment improved.
"In my view, Indian markets could also witness some revival tomorrow, driven by positive expectations from this 90-day pause. Even though this pause has provided temporary relief, sectors directly impacted by the tariffs, such as pharmaceuticals and seafood exports, continue to face challenges," said Pranay Aggarwal, Director & CEO of Stoxkart.
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