Tariffs, US inflation, RBI rate decision likely to guide market movement

In an eventful week ahead, stock markets may face volatile trends before the RBI's interest rate decision and the US inflation data announcements, as investors continue to assess the broader implications of US tariffs on global economy and inflation, analysts said.

Investors fear that a full-blown trade war will impact global trade and economic growth, according to market experts.

Equity markets would remain closed on Thursday for "Shri Mahavir Jayanti".

"This week is set to be volatile for global and Indian markets, as US President Donald Trump imposed tariffs worldwide, igniting fears of an all-out trade war and a global economic recession.

"The US inflation numbers will be released along with the FOMC (Federal Open Market Committee) minutes," Puneet Singhania, Director at Master Trust Group, said.

Equity benchmarks slumped on Friday due to an across-the-board sell-off, tracking weak global markets amid growing global trade war fears.

Domestically, the RBI will decide on interest rates. India's industrial and manufacturing production data is also set to be released this week, he said.

US equity markets tanked nearly 6 per cent on Friday, closing the worst week for the stocks since 2020.

China's Consumer Price Index (CPI) data for March is scheduled for release on Thursday, and the UK GDP data on Friday, Singhania added.

Last week, the BSE Sensex tanked 2,050.23 points, or 2.64 per cent, while the NSE Nifty declined 614.8 points, or 2.61 per cent.

"This week, Indian markets are expected to be volatile on the back of concerns over the impact of the US reciprocal tariffs and potential announcements of further sector specific tariffs during the week.

"Also, focus will be on RBI's monetary policy outcome on 9th April, where the market is expecting another 25 bps rate cut, and Q4 FY25 earnings season kicking off with TCS results on 10th April," Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services, said.

Investors will also watch out for March CPI data from the US and India to be released this week, he said.

Markets would keenly monitor trading activity of foreign investors, rupee-dollar trend and crude oil prices this week, experts said.

Last week, benchmark indices declined following a global sell-off sparked by Trump's tariff announcements and renewed concerns over economic slowdown, Khemka added.

"Investors fear Trump's reciprocal tariff policy will fuel recession and drive inflation in the US going ahead and will also engulf other key economies," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said, "The trend of FPIs turning buyers in March changed in early April when FPIs turned sellers again. A major trend reversal in global stock markets happened after President Trump announced reciprocal tariffs on April 2nd."  The reciprocal tariffs came much steeper-than-expected, he noted.

"The 10 per cent baseline tariff on all imports, the 25 per cent tariff on all automobile imports and steep reciprocal tariffs on most countries is expected to raise inflation in the US and there are concerns that the US economy might even slip into stagflation. This triggered massive selling in the US markets where S&P 500 and Nasdaq lost above 10 per cent in two days," Vijayakumar said.