Sweeping tariffs gone but Trump's 15% global tariffs on. What to expect from markets on Monday?

If GIFT Nifty is any indication, investors can expect a strong start when trading resumes on Monday after the US Supreme Court’s Friday decision striking down Donald Trump’s sweeping tariffs. GIFT Nifty settled 320 points, or 1.25%, higher at 25,886.

Sectors in focus
Export-oriented sectors such as gems and jewellery, textiles, marine products and pharmaceuticals are likely to remain in focus. The auto sector could also see action. Earlier, the US administration had imposed a 100% tariff on certain patented and branded drugs, impacting pharma exporters.

Expert views
Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, termed the court ruling a major sentiment booster for Indian markets and a setback for the Trump administration. He said the tariff measures had created significant global uncertainty and ambiguity.


However, Bathini cautioned investors to closely track developments in the coming days, particularly any “face-saving” measures from the Trump administration. He noted that Trump had weaponised tariffs, and even a proposed 10% global tariff would require vetting by the US Congress. Since trade policy does not fall under emergency powers, subsequent measures could face further scrutiny.

Trump’s response
Following the Supreme Court decision, Trump signed documents imposing a 10% tariff on imports from all countries, which was later raised to 15%. He said the move would be “effective almost immediately.”

In a post on Truth Social, Trump criticised the court’s ruling and announced the increase in the worldwide tariff from 10% to 15%, calling it “legally tested” and necessary to protect US interests. He added that in the coming months, the administration would determine and implement new legally permissible tariffs.

Market reaction
Market veteran Gurmeet Chadha welcomed the Supreme Court’s decision, calling it positive news, especially for under-owned markets such as India. He described it as a political setback for Trump ahead of midterm elections and amid low approval ratings.

“Focus will shift to boosting the economy and lowering inflation. That means less global uncertainty and fewer policy flip-flops,” said Chadha, Managing Partner and CIO at Complete Circle Consultants.

Also read: Trump made tariffs central to his presidency. Chaos may come next

On Saturday, Trump said that he was raising the global tariff as he wants to impose to 15%, up from 10% he had announced a day earlier.

SC ruling on India: what it means for markets?

"Removal of reciprocal tariffs will free about 55% of India’s exports to the US from 18% duty, leaving them subject only to standard MFN tariffs," Global Trade Research Initiative (GTRI) analysis said, as reported.

According to the think tank, Section 232 tariffs will continue, 50% on steel and aluminium and 25% on auto components. Meanwhile, products accounting for roughly 40% of export value, including smartphones, petroleum products and medicines, will remain exempt from US tariffs, the report said further, citing the GTRI analysis.

So, investors should track movement of metal stocks for likely disappointment while monitoring the EMS and generic pharma space as well.

Reacting to the ruling, frontline indices on Wall Street also ended higher, with the Dow 30 closing with gains of 0.5%. The S&P 500 index and Nasdaq Composite finished with an uptick of 0.70% and 0.90%.

Also read: US Supreme Court ruling overturning Trump tariffs could spook bond vigilantes

Sudeep Shah, Vice President & Head of Technical and Derivative Research Desk at SBI Securities also expects a positive start to the next week. "This development is a significant positive for export-oriented sectors, as businesses will now be subject to a uniform 10% global import duty under Section 122 of the Trade Act of 1974 for 150 days — a provision that has been invoked for the first time," he said.

In his view, sectors such as IT, pharma, metals, textiles and energy stand to benefit from the reduction in tariff uncertainty. The introduction of a uniform 10% rate across countries also removes the relative disadvantage arising from differential trade arrangements with the US, he opined.

Shah said situation remains fluid as there is uncertainty surrounding the approximately $175 billion collected under tariffs over the past year and the potential implications of refund claims.

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