The Morning Edge: Trade Winds Stir Ahead of US-India Pact Talks

QUICK SNAPSHOT
Global Sentiment: Risk-on 
Factors: Corporate Earnings, Trade Talks

TODAY’S WATCHLIST
US April S&P Global Composite PMI
US April ISM Non-Manufacturing Employment data
Mahindra & Mahindra Earnings

THE BIG STORY
As momentum builds around a proposed bilateral trade agreement between India and the US, Washington is expected to press for wide-ranging changes that could favour American exporters and multinationals, according to the Global Trade Research Initiative. The think tank’s founder, Ajay Srivastava, said the US demands include reducing agricultural tariffs, cutting back India’s minimum support price programmes for staples like rice and wheat, and lifting restrictions on genetically modified imports. In the dairy sector, India’s strict GM-free feed certification and animal-based feed bans are seen by the US as de facto trade barriers.
On the retail front, Srivastava noted that the US is likely to push for fewer restrictions on companies like Amazon and Walmart, which are currently constrained by India’s rules on foreign-owned inventory-based e-commerce. However, India maintains that these safeguards are crucial to protect small domestic retailers and preserve regulatory autonomy in a rapidly evolving sector. The US has also criticised India's licensing process for remanufactured and second-hand capital goods as slow and costly, adding further friction to what is shaping up to be a high-stakes negotiation.

DATA
US nonfarm payrolls grew by 177,000 in April down from a revised 185,000 in March, surpassing economists' 130,000 forecast, while unemployment held steady at 4.2%. Though the report eased immediate recession fears after Q1's GDP contraction, analysts note the labour market's resilience may not yet reflect the growing economic uncertainty from Trump's erratic trade policies. The data shows employers maintaining staff despite tariff headwinds, but the delayed impact of protectionist measures leaves the jobs outlook increasingly fragile.

WHAT HAPPENED OVERNIGHT
US stocks extended gains for a second consecutive week on Friday, lifted by encouraging economic data and potential US-China trade de-escalation, though Apple slid 4% after reducing its buyback programme and warning of $900 million in tariff costs. The Magnificent Seven saw mixed performances, with Meta climbing 4.3% and Nvidia rising 2.6%, while Amazon edged down 0.1%. Energy stocks Chevron (+1.6%) and ExxonMobil (+0.4%) advanced on solid earnings, but Block plummeted 20% on a grim 2025 outlook and Take-Two Interactive dropped 7% after delaying its flagship game release.

US Treasury surged on Friday, with the 10-year yield jumping 7.7 basis points to 4.308% and the policy-sensitive 2-year yield spiking 12.5 basis points to 3.826%, as robust jobs data and potential US-China tariff talks reduced expectations for June Fed rate cuts. The 30-year bond yield rose 5.2 basis points to 4.789%, reflecting a broad market pivot toward risk assets. 

The US dollar edged lower despite the strong US jobs report, with the dollar index dipping 0.14% to 100.00 as the euro gained 0.12% to $1.1304. The greenback also weakened 0.3% against the yen to 144.99, suggesting markets may be looking beyond domestic labour data to global factors like potential Fed policy shifts. 

Brent crude oil prices slid more than 1% on Friday, capping their worst weekly performance since late March, as market participants grew wary ahead of the upcoming OPEC+ meeting set to determine June output policy. U.S. West Texas Intermediate crude dropped 95 cents, or 1.6%, to close at $58.29 a barrel, while Brent crude fell 84 cents, or 1.4%, to settle at $61.29. 

Day’s Ledger

Economic Data

• US April S&P Global Composite PMI
• US April ISM Non-Manufacturing Employment data

Corporate Actions

• Jan-Mar earnings: Mahindra & Mahindra, Bombay Dyeing & Mfg Company,  Capri Global Capital, CCL Products (India), Cigniti Technologies,  Coforge,  Computer Age Management Services,  Davangere Sugar Company, DCM Shriram, Entertainment Network (India),  Hind Rectifiers, Kalyani Steels, Mittal Life Style, Nila Spaces,   Prataap Snacks, Indian Hotels Company, Jammu & Kashmir Bank, Vinyl Chemicals (India), and Zee Media Corporation
• Goodluck India to consider fund raising

Policy Events

• German Buba Mauderer Speaks

TICKERS

• ADANI PORTS AND SEZ’s April cargo volume rose 4% YoY to 37.5 MMT, led by containers (up 21%) and liquids/gas (up 8%).
• AZAD ENGINEERING Signed long-term deal with GE Steam Power GMBH to supply complex airfoils for power sectors.
• CITY UNION BANK March quarter profit increases 13% YoY to ₹2.88 billion from ₹2.55 billion.
• CONCORD BIOTECH informed that US FDA issued Form 483 with four procedural observations for Dholka API unit.
• GOCL CORPORATION board approved sale of IDL Explosives to Apollo Defence Industries.
• INDIAN BANK March quarter standalone profit jumps 31.6% YoY to ₹29.56 billion from ₹22.47 billion.
• IRCON INTERNATIONAL received ₹4.58 billion work order from North Eastern Electric Power Corporation.
• JSW STEEL informed that Revisionary Authority overturned ₹7.02 billion demand notice over mining violations in Odisha.
• MARICO March quarter consolidated profit grows 7.8% YoY to ₹3.45 billion from ₹3.20 billion.
• NTPC subsidiary NTPC Renewable Energy began commercial ops of final phase of 60 MW Gujarat solar project.
• SBI March quarter profit drops 9.9% YoY to ₹186.43 billion from ₹206.98 billion.
• SHILPA MEDICARE subsidiary Shilpa Biologics obtained European GMP certification for Dharwad plant.
• SUNTECK REALTY March quarter consolidated profit plunges 50.3% YoY to ₹0.50 billion from ₹1.01 billion.
• TATA MOTORS board approved issue of non-convertible debentures (NCDs) worth up to ₹5 billion.
• TATA STEEL informed that LIC raised stake to 7.851% from 5.836% between 28 July 2022 and 30 April 2025.
• VOLTAMP TRANSFORMERS March quarter profit rises 3.5% YoY to ₹0.97 billion from ₹0.94 billion.

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