Tariff Noise Fades - Rally Next?

Markets Overview

It was a decent week overall. The murmur from the US administration is not dying down, though. Midweek they were asking the EU to impose tariffs on India, and by the end of the week, they were urging the G7 to do the same. It seems they are running out of tactics, and India, very smartly, is not even responding. Negotiations are ongoing, and much of this noise looks more like a bargaining tactic than a genuine escalation.

Many commentators believe that within a couple of months the deal—whatever form it takes—between the US and India will be done and dusted. The market also seems to have largely discounted this tariff issue, with investors no longer reacting nervously to every statement. Instead, the focus is shifting back to internal market dynamics. Nifty gained 1.5% this week. The index opened flat but gathered strength through the week.

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The week ended with the market showing hope for a possible Fed rate cut next week, and there was a fair amount of optimism in the air.

One of the big news items was the ₹18,000 crore buyback program announced by Infosys. Buybacks are often used by companies to lift sentiment when there are not many other growth options visible. It is essentially the company saying that instead of finding new ways to use the cash, it is returning the money to shareholders. While some see it as a clever accounting play, it is a very common global practice to keep stock prices up.

Rebalance Update for the week