GIFT Nifty hints at 3% rally on Friday, as tariff pause eases global jitters: Key factors at play

US President Donald Trump

Equity benchmarks are likely to witness a gap-up opening on Friday as the domestic markets resume trading after a holiday, on the back of strong global cues following US President Donald Trump’s decision to pause tariffs for 90 days on all countries except China.

Domestic markets remained closed on Thursday due to Mahavir Jayanti.

Gift Nifty Futures is up nearly 700 points or 3 percent to 23,173 at around 5 PM from its Wednesday' closing in the afternoon trade at 22,487.

Following a days-long market rout that erased trillions of dollars from global stocks and jolted U.S. Treasury bonds and the dollar, Trump on Wednesday announced a 90-day pause on many of his new tariffs in a shock reversal. He also heaped pressure on China, saying he would raise the tariff on Chinese imports to 125% from the 104% level that came into effect on Wednesday.

Trump's reversal on the country-specific tariffs is not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.

In the previous session on Wednesday, both the Sensex and Nifty ended lower amid global weakness, despite the Reserve Bank of India slashing policy rates for the second straight time.

Here are three key reasons why the Nifty could see a gap-up opening on Friday:

1. Tariff Relief: The 90-day pause on reciprocal tariffs is expected to bring a relief rally in the domestic equities. The pause also provides New Delhi a breather to finalise a bilateral trade agreement (BTA) with Washington. Ministry of External Affairs Spokesperson Randhir Jaiswal said on Wednesday that negotiations were ongoing for a "mutually beneficial multi-sectoral bilateral trade agreement."

Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), said, "President Trump’s 90-day pause on tariffs for India and several other countries reflects a tactical recalibration rather than a fundamental policy shift — but it’s a welcome development. It allows Indian businesses space to stabilise supply chains and gives policymakers time to work on longer-term trade solutions."

2. Receding US Recession Fears: Goldman Sachs economists have withdrawn their recession forecast following a pause in tariffs by US President Donald Trump, according to a report by The Wall Street Journal. In a note released Wednesday afternoon, a team led by chief economist Jan Hatzius said, "We are reverting to our previous non-recession baseline forecast with GDP growth of 0.5% and a 45% probability of recession."

3. Strong Global Cues: Global markets surged following the US announcement. In the US, the S&P 500 soared 9.52 percent in its best single-day performance since 2008, while the Nasdaq jumped 12.16 percent—its second-largest one-day gain on record. The Dow Jones rose 7.87 percent to close above 40,600.

Asian indices also rallied, with Japan’s Nikkei 225 climbing 8 percent, Hong Kong’s Hang Seng up 3 percent, South Korea’s Kospi rising 6 percent, and Shanghai Composite gaining over 1 percent.

Gift Nifty, an early indicator for domestic equities, was on Thursday trading over 700 points higher from Wednesday’s Nifty Futures close of 22,502, signalling a likely gap-up start on Friday.

European futures were also up sharply with EUROSTOXX 50 futures and DAX futures climbing nearly 8% each, while FTSE futures gained 5.4%.

Ajit Mishra, SVP – Research, Religare Broking, said, "Apart from global developments, investors will closely watch IT heavyweight TCS’s quarterly results in early trade. Given the elevated India VIX, volatility may remain high."

TCS, India’s top software exporter, is scheduled to announce its fourth-quarter results for FY25 later on Friday.

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