Markets set for bumper Friday open as Trump tariff U-turn lifts mood

Domestic markets are set for a strong gap-up opening on Friday, lifted by a global rally after US President Donald Trump unexpectedly rolled back some tariff measures. Market participants said the benchmark Sensex and the Nifty could open more than 2 per cent higher, with sectors such as information technology and pharmaceutical rising by as much as 5 per cent.

 

Even so, many remain doubtful about the rally’s durability, as attention shifts to a weakening economic outlook and continued volatility.

 

On Wednesday, Trump announced a 90-day pause on additional tariffs for countries open to negotiations with the US, even as he raised tariffs on Chinese goods to 125 per cent from 104 per cent. The 10 per cent base tariff on imports from most other countries will remain during this period.

 

The move — viewed as a tentative retreat from a full-blown trade war — triggered a sharp rally across global equity markets on Thursday. European markets climbed over 5 per cent, while Japan’s Nikkei jumped more than 9 per cent. Indian markets were shut for a public holiday.

 

Market players said gains in Indian equities may not match those in Europe or Japan, as local indices had not declined as steeply in recent sessions.

 

Since April 2, the Sensex has dropped 3.6 per cent, the Nifty 4 per cent, and the market capitalisation of BSE-listed firms has eroded by ₹19.2 trillion. Brent crude fell 13.5 per cent to $65 by Thursday, while the 10-year US bond yield rose 16.6 basis points to 4.29 per cent amid heavy selling.

 

US markets staged a strong rebound, with the S&P 500 jumping 9.5 per cent and the Nasdaq gaining 12.2 per cent on Wednesday, driven by aggressive short covering. However, that momentum began to ebb, with US futures down over 1 per cent on Thursday.

 

Analysts expect a similar wave of short covering — following the recent selloff — to support Indian indices on Friday.

 

“Markets are likely headed for a gap-up on Friday,” said Amar Ambani, executive director at Yes Securities. “The reaction is already evident. Indian indices held firm in the last session, and this three-month pause is meaningful. China’s exclusion could work in India’s favour, with investors scouting for opportunities in sectors where Indian firms can pull ahead.”

 

Still, volatility is expected to persist as investors weigh shifting tariff policies and their knock-on effects on growth, inflation, central bank actions, and broader financial markets.

 

“This global rebound gives investors a chance to reassess, diversify, and brace for a volatile second quarter, while positioning for longer-term upside,” UBS said in a note.

 

Looking ahead, policy uncertainty and rising trade tensions may continue to keep markets on edge.

 

“The US rally has already cooled, and GIFT Nifty is down,” said U R Bhat, cofounder of Alphaniti Fintech. “Wednesday’s excitement may prove short-lived as negotiation outcomes remain uncertain. The full fallout from China’s tariff hike is still playing out. A gap-up opening is likely if global corrections remain shallow, but foreign portfolio investor selling hasn’t stopped, and it’s unclear how long domestic flows can keep the market afloat. Indian indices remain on shaky ground.”