Trade Uncertainty, Budget Ahead — Why Markets Cracked ??

Markets Overview

This week turned out to be a clear red week for the markets, and once again, the Trump-related narrative has returned to the forefront. Social media has been flooded with clips and commentary suggesting that the US administration wants India’s Prime Minister to initiate talks and resolve the ongoing trade issues. However, that call has not happened so far. For reasons that remain unclear, a near-term resolution to the US–India trade deal does not appear imminent. On top of that, the threat of an extreme 500% tariff proposal continues to hover in the background. If something as drastic as that were to materialize, the consequences would be unpredictable. For now, this remains a high-stakes negotiation, with both sides holding firm positions. Until clarity emerges, markets are likely to remain volatile and reactive, swinging back and forth with every headline.

At the same time, we are now less than three weeks away from the Union Budget, which introduces another layer of anticipation into the market. Certain pockets have already started showing movement as investors begin positioning themselves for possible policy announcements, incentives, or allocations. Historically, this pre-budget phase often leads to selective sectoral action rather than broad-based rallies, and early signs of that behavior are beginning to surface.

Looking at the Nifty daily chart, the damage from this week is clearly visible. All five trading sessions ended in the red, resulting in a complete breakdown from the optimism we had just last week when the index was flirting with fresh all-time highs. From those elevated levels, Nifty has seen a sharp pullback, breaking some short-term trend lines in the process. This kind of price action suggests that the market will need time to repair before attempting another meaningful upside move. The index ended the week down 2.5%, which is a significant shift in momentum over such a short period.

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The market continues to move on a negative trajectory as the week comes to a close. On this Friday episode, the Nifty has recorded its fifth consecutive red candle, marking a difficult stretch for Indian indices.

The major headline dominating the financial landscape is the U.S. Supreme Court’s pending verdict on the tariff situation, a decision with massive implications for global trade. While the week actually began on a positive note, that optimism was short-lived.

Rebalance Update for the week