Tariff timeout sets stage for a freaky Friday rally. GIFT Nifty up over 3%

GIFT Nifty was trading 744 points higher at 23,231.5 as of 1:41 pm IST on Thursday, indicating a potential positive start when markets resume trading on April 11. Indian stock exchanges remained shut on April 10 in observance of Mahavir Jayanti.

Trump’s surprise announcement comes after a sharp global market selloff that had erased trillions in value. On Wednesday, he posted on Truth Social: “I have authorized a 90-day PAUSE,” referring to reciprocal tariffs. Over 75 countries negotiating trade terms with the US, and who had not retaliated against earlier tariffs, are expected to benefit from this pause.

However, tariffs on Chinese imports were raised to 125%, up from 104% imposed earlier this week.

Treasury Secretary Scott Bessent clarified that while the new tariffs would be paused for most nations, a 10% blanket duty on imports will remain. Existing levies on autos, steel, and aluminium will also stay in place.

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Key triggers behind Friday’s likely rally:

1) Tariff suspension

Trump’s announcement on April 9 has temporarily eased fears of a full-scale global trade war. While not a complete rollback, the move reduces immediate trade tension risks. The White House said a 10% flat duty will still apply on most imports, and duties on specific sectors like autos, steel, and aluminium remain unchanged.Despite a hike in tariffs on Chinese goods, investors welcomed the 90-day relief window for other countries, helping shift market focus away from broader trade uncertainties.

“Recent developments in U.S. trade policy under President Donald Trump have led to significant fluctuations in global markets,” said Pranay Aggarwal, Director & CEO of Stoxkart. “The 90-day pause was met with a positive response from international markets, and Asian indices, including India’s, rebounded as investor sentiment improved.”

He noted that while the pause offers temporary relief, sectors like pharmaceuticals and seafood exports remain vulnerable and require close monitoring.

2) Global equity rally boosts sentiment

The news triggered a sharp rebound across global markets. European futures rallied during the Asian session—EUROSTOXX 50 and DAX futures surged nearly 8%, while FTSE futures gained 5.4%. Japan’s Nikkei jumped more than 8%.

Overnight, in the US, the Dow Jones Industrial Average rose 7.87%, the S&P 500 gained 9.52%—its best one-day gain since October 2008—and the Nasdaq soared 12.16%, its largest jump since January 2001 during the dotcom boom.

3) Bond yields ease after sharp selloff

US bond markets, which had seen steep declines earlier in the week, showed signs of recovery. The benchmark 10-year Treasury yield fell to 4.29% on Thursday, after hitting 4.515% in the previous session.

The recent selloff had revived concerns over liquidity in the world’s largest bond market, with some comparing the volatility to the COVID-era “dash for cash.”

4) Recession fears dialed back

Goldman Sachs, which had projected a high risk of US recession, revised its outlook after Trump’s tariff suspension. Just before Trump’s social media post, Goldman had assigned a 65% chance of recession within the next year. But following the announcement, it lowered the probability to 45% and now expects only 0.5% GDP growth for the US in 2025.

Despite this revision, the investment bank warned that ongoing policy unpredictability could continue to weigh on economic confidence.

5) India’s outlook stays resilient

Rahul Singh, CIO – Equities, Tata Asset Management, said the global tariff changes have created uncertainty, but India remains relatively well-positioned.

“The recent global tariff changes have added uncertainty to markets, but India is better positioned than before. With lower exposure to US trade and strong domestic demand, the direct impact remains manageable. In fact, falling global prices of crude and metals may support Indian companies by reducing input costs,” Singh said.

“Sectors like banking, pharma, and energy now offer attractive value with solid balance sheets. As the market moves from global trends to company-specific opportunities, disciplined investing in large cap, flexi cap, and multi-asset funds, especially those with gold exposure, can help reduce portfolio risk. While short-term volatility may continue, India’s relative strength offers long-term confidence to investors.”

Also Read: World’s 10 richest billionaires add $135 billion in wealth after Trump’s tariff pause; Musk, Zuckerberg see biggest surge

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)