Sensex, Nifty Set To Open Lower As Trump Again Threatens India With Harsh Tariffs

(RTTNews) - Indian shares may open on a weak note Tuesday after U.S. President Donald Trump threatened to "substantially" raise tariffs on goods imported from India, accusing that the country profited from Russia's war in Ukraine by purchasing large quantities of Russian oil and reselling it on the global market.

The Ministry of External Affairs has said that it is unjustified and unreasonable for India to be targeted by the United States and the European Union.

In a statement, the Ministry asserted that India would take all necessary measures to safeguard its national interests and economic security.

Markets may also see some volatility on the eve of the first weekly expiry of the Sensex contracts for the August series and upcoming Reserve Bank of India's monetary policy decision on Wednesday.

Economists are split on whether RBI's monetary policy board will continue cutting rates amid U.S. tariff shock and growth risks.

Benchmark indexes Sensex and Nifty rose around half a percent and 0.6 percent, respectively on Monday to snap a two-day losing streak.

The rupee slumped 48 paise to close at 87.66 against the U.S. dollar, weighed down by continued foreign fund outflows, renewed trade worries, and rising dollar demand from oil importers.

Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 2,566 crore on a net basis on Monday, while domestic institutional investors (DIIs) net bought shares to the extent of Rs 4,386 crore, according to provisional NSE data.

Morgan Stanley said Indian equities will likely scale new highs, with the Sensex expected to reach 89,000 by June 2026 in its base case due to improved macroeconomic stability and ongoing shift in household balance sheets towards equity.

Asian markets traded higher this morning, mirroring firm cues from Wall Street and Europe on the back of positive earnings reports and hopes for rate cuts.

The dollar wavered and gold edged up to trade around $3,380 per ounce after San Francisco Federal Reserve Bank President Mary Daly called for a rate cut.

Oil steadied after a three-day drop as investors weighed risks to Russian supplies, following Trump's announcement of slapping more tariffs on India.

U.S. stocks rose sharply overnight, reversing the steep losses seen in the previous session on jitters about President Trump's new modified tariff rates.

In economic news, data showed factory orders, a key indicator of the health of the manufacturing sector, fell sharply in June as expected.

The S&P 500 rallied 1.5 percent to snap a four-day losing run amid optimism about interest-rate cuts. The tech-heavy Nasdaq Composite surged 2 percent and the Dow advanced 1.3 percent.

European stocks rebounded on Monday after falling by the most in the previous session. The pan European STOXX 600 gained 0.9 percent.

The German DAX climbed 1.4 percent, France's CAC 40 added 1.1 percent and the U.K.'s FTSE 100 rose 0.7 percent.