Trump’s Tariffs Rattle Stocks, Rupee Rides Dollar Downturn 

HIGHLIGHTS

Trump’s Reciprocal Tariff Impact  

• Pharma stocks surge as US spares sector 
• Shares of seafood exporters Avanti Feeds, Apex Frozen Foods sink up to 15% 
• IT stocks face severe pressure on growth concerns 
• Gold prices sparkle at all-time high as Trump's tariffs fuel safe-haven rush 

Other Highlights  

• Bajaj Finance declines on reports of RBI's 'letter of displeasure' over credit card lapses 
• Tejas Networks shares surge 9% amid reports of BSNL’s ₹610 billion 5G expansion plan

A highly volatile session saw Indian equity markets closing lower today, as global sentiment weakened following tariffs announced by US President Donald Trump. However, the cuts were not as deep as other Asian and European peers. 

The broader market remained resilient, supported by gains in financial and pharmaceutical sectors. The Nifty Bank index rose 0.5%, while the Midcap index gained 0.2%. Market breadth remained positive, with an advance-decline ratio of 5:2, indicating a strong number of gainers in the broader indices. 

 SECTORAL PERFORMANCE 
Pharma stocks emerged as tariff war winners, while IT stocks faced deep gashes due to growth concerns and potential cuts in client spending. The Nifty Pharma index hit a one-month high, led by Ipca Labs and Lupin, which closed with gains of over 4% each. The Nifty IT index, on the other hand, hit a nine-month low, with 2-4% cuts on some of the heavyweights.

Top Gainers	% Change	Top Losers	% Change
NIFTY PHARMA	2.25%	NIFTY IT	-4.2%
NIFTY HEALTHCARE INDEX	1.98%	NIFTY AUTO	-1.1%
NIFTY PSU BANK	1.94%	NIFTY METAL	-0.8%
NIFTY MEDIA	1.09%	NIFTY OIL & GAS	-0.5%
NIFTY BANK	0.49%	NIFTY FINANCIAL SERVICES	-0.1%

The 10-year Indian government bond yield closed at 6.48% after hitting a 3-year low as traders booked profits ahead of the largest-ever weekly sale of the benchmark paper.

The Indian government is set to auction gilts worth ₹360 billion on Friday, including the largest-ever sale of the 10-year note worth ₹300 billion.

In Apr-Sep, the RBI will auction the 10-year benchmark government bond once every four weeks, with a consistent auction of ₹300 billion.

On Wednesday, the 10-year yield had posted its biggest ever single-day drop since May 2023, after the RBI said it will buy bonds worth ₹800 billion in April.

Tenure	Today	Previous
10-year Gilt	6.50%	6.48%
5-year gilt	6.35%	6.34%
5-year OIS	5.80%	5.83%

The Indian rupee staged a U-turn, closing at 85.43, from early low of 86.75 and the previous level of 85.47 as: 
-    The dollar index declined by over 1% to 101.52
-    Exporters likely sold the dollar
-    Likely custodial inflows 

Unit	Today	Previous
Dollar/Rupee	85.43	85.50
Dollar Index	101.52	103.49
1-year Dollar/rupee premium (%)	2.25%	2.20%

OUTLOOK
Heightened global uncertainty due to Trump’s "reciprocal tariffs" may cause near-term correction and turbulence in equity markets globally.

However, these tariffs bring in both concern and clarity for domestic investors. Key export-oriented sectors such as electronics, textiles, gems & jewellery, auto parts, and processed foods will face headwinds due to steep US duties, while the pharmaceutical sector’s exemption offers a silver lining.

The rupee has closed above 85.50 for three successive days, and the dollar/rupee is expected to stay in the range of 85.00 to 85.70 as the market awaits India services PMI and US employment data.

Key Events & Data Due Friday
Economic Data:

• India March S&P Services PMI
• India Weekly FX Reserve Data
• US March Non-farm Payrolls Data
• US Baker Hughes Oil Rig Count Data

Corporate Actions:

• Biocon board to consider fundraising plan
• Housing & Urban Development Corporation board to consider fundraising plan
• Power Grid Corporation of India board to consider fundraising plan
• Hexaware Technologies board to consider dividend

Policy:

• ECB's De Guindos speaks
• US Fed Chairman Powell speaks
• Fed Waller speaks
• US Fed Vice Chair for Supervision Barr speaks