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Most experts believe the market will face short-term volatility, but the long-term structural outlook remains strong. Tariffs imposed across various regions are expected to increase global input costs, potentially driving U.S. inflation higher and complicating the Fed s planned rate cuts—something the markets had been depending on.

Trump s broad tariffs hit global trade, but Indian banks show resilience. US bond yields fall to 4.05%, aiding Indian lenders. India’s 10-year bond yield eases to 6.59%. Bank Nifty gains slightly. The US dollar index drops to 102.4, supporting emerging market fund inflows.

European shares hit a two-month low as new U.S. tariffs heighten economic growth concerns. Germany s stocks dropped 1.8%, with Wall Street futures down 3.1%. U.S. President Trump s tariffs impact trade with the EU and China. Eurozone banks fell 3.5%, Adidas and Puma plummeted over 9%, and luxury goods firms experienced declines. ECB rate cuts are now anticipated.

Shares of midcap IT firms like Coforge and Persistent Systems plunged by up to 10% following renewed inflation fears in the U.S. due to President Trump s reciprocal tariffs. Concerns about a potential pullback in tech spending by U.S. companies could impact revenue growth for these firms.

Short covering lifted five stocks in Thursday’s session as traders bought back previously shorted shares, reducing open interest and driving prices higher amid shifting market sentiment.

Veteran Investor Manishi Raychaudhuri discusses the impact of recent tariffs on various Asian markets. He points out the surprising calmness in financial markets and highlights sectors like IT and pharma. He expects a short-term correction in Indian markets but remains optimistic about a recovery in the second half of the year due to government infrastructure spending and other economic tailwinds.

In an interview with ET Now, Memani suggested that instead of tactically shifting between equity sectors for safety, investors should consider fixed income options. "If you have $2 to invest, you re likely better off in the bond market than in the equity market," he stated.

With Trump increasing tariffs on China, sectors where India could gain market share in U.S. exports include textiles, apparel, and footwear. Additionally, India sees an opportunity to boost exports of iron and steel products, leveraging its manufacturing capabilities, particularly if China s tariffs are raised.

India s pharmaceutical sector avoids immediate impact from newly declared tariffs on over 60 countries. However, HDFC Securities estimates potential hits to EBITDA ranging from 3-45% under different scenarios. Sun Pharma, Aurobindo, and Dr. Reddy’s have significant US sales, making them more vulnerable.