What to Expect in the Stock Market as Key Trade Tariffs Approach Their Deadline
Market Outlook for the Upcoming Week
New Delhi: Investors in the equity market are gearing up for a significant trading week as the 90-day suspension of reciprocal tariffs, initiated by former US President Donald Trump, concludes on July 9. Analysts suggest that a favorable resolution from ongoing trade discussions could enhance market sentiment, especially for sectors sensitive to trade.
Additionally, the quarterly earnings report from IT giant TCS and the movement of foreign funds are expected to influence the mood on Dalal Street, according to experts.
The deadline of July 9 is crucial as it marks the end of the suspension period for tariffs imposed on various countries, including India, which faces an additional import duty of 26% on goods entering the US.
"This week is pivotal not just for Indian markets but for global equities as well. The outcome of the US trade tariff deadline on July 9 is highly anticipated and could significantly impact global trade dynamics. Investors will also be keenly observing the release of the US FOMC (Federal Open Market Committee) minutes on the same day," stated Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd.
On the domestic front, attention will shift to corporate earnings, with TCS and retail giant Avenue Supermarts among the key companies set to announce their quarterly results, which will set the tone for the Q1 earnings season.
Investors will also keep an eye on fluctuations in global oil prices, particularly Brent crude, and the trends of the rupee against the dollar this week.
"A positive outcome from the US-India trade negotiations could further boost market sentiment, especially benefiting sectors like IT, pharmaceuticals, and automotive. Given that broader indices are currently at high levels, market participants will be vigilant for signs of earnings recovery from the upcoming Q1 reports starting this week," remarked Vinod Nair, Head of Research at Geojit Investments Limited.
Last week, the BSE benchmark Sensex fell by 626.01 points, or 0.74%, while the NSE Nifty dropped by 176.8 points, or 0.68%.
"Overall, we anticipate the market to remain in a consolidation phase, awaiting clarity on the India-US trade agreement, while stock-specific movements will continue based on Q1 FY26 business updates ahead of the earnings season commencing this week," commented Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd.
Regarding foreign fund flows, V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted, "The resumption of buying by Foreign Institutional Investors (FIIs) will depend on two factors: first, whether a trade deal is reached between India and the US, which would positively affect markets and FII flows; second, indications from Q1 FY26 results. Positive results could signal earnings recovery, while disappointing outcomes could negatively impact the market and FII flows."