As US Tariff Clock Ticks, Markets Refuse to Blink

Cautious Optimism Builds as Investors Bet on Delay or Deal

- SUNDAR SETHURAMAN & SAMIE MODAK

Domestic stock markets are holding firm even as the July 9 deadline approaches for the new US tariff rates—ranging from 10 percent to 50 percent—announced by US President Donald Trump on April 2.

The tariffs, paused for 90 days to allow for bilateral trade negotiations, have sparked cautious optimism among investors who foresee an extension or a favorable US-India trade deal. The benchmark Nifty 50 index last ended at 25,542, less than 3 percent below its record closing of 26,179 on September 27, 2024. From this year's low of 22,162 on April 7, the Nifty has rallied more than 15 percent.

Amish Shah, head of India research at BofA Securities, said, "Markets are fully pricing in an imminent India-US trade deal, making any delay or disappointment a major risk."

Nimesh Chandan, chief investment officer at Bajaj Finserv Mutual Fund, described the potential for an extension as "kicking the can down the road," as inking trade agreements within a short period is challenging.