Equity market may rally on thin ice after a weekend of US tariff twists

Subscribe to enjoy similar stories. Indian equities may attempt a relief rally this week, but renewed uncertainty around US trade policy is likely to keep investors on their toes. A weekend of sharp tariff moves from Washington has once again clouded the outlook for global markets, including India.

In a dramatic policy pivot late Friday, US President Donald Trump unveiled a fresh 10% global tariff to replace the levies struck down by the US Supreme Court. Branding the ruling “terrible", he took aim at the judges who had rejected his trade policies. Barely 24 hours later, on Saturday night, the President escalated matters, raising global tariffs from 10% to the maximum permissible 15% and describing the court’s verdict as “extraordinarily anti-American".

He also signalled that his administration would explore other legally permissible tariff options in the months ahead. The initial 10% levy had sparked hopes of a mildly positive reaction in Indian equities, reflected in a quick 1% pop in Gift Nifty soon after Friday’s announcement. That relief, however, now appears fragile.

But that relief now looks fragile. The swift escalation to 15% and the prospect of additional tariff measures have injected fresh uncertainty, suggesting that any relief rally could prove shortlived, tempering optimism and keeping investors on the edge. “We were pricing in stabilization of growth and easing pressure on foreign outflows post the announcement of the trade deal in the first half of the month, but the (US's) SC development brings back uncertainty," said Shravan Sreenivasula, executive director - investment solutions at Avendus Wealth Management.