Investors Nervous as India-US Tariff Deadline Approaches on July 9; Q1 Earnings and FII Investments to Impact Market Sentiment

The upcoming week in Indian equity markets is expected to be filled with heightened volatility as investors eagerly await the July 9 deadline for the expiry of the US’s 90-day tariff suspension on Indian imports. As the market navigates through this significant event, key factors to watch include the enforcement of an additional 26 per cent duty on Indian goods announced by President Donald Trump earlier this year.

The uncertainty surrounding the tariff issue remains as the deadline approaches, with no formal resolution in sight. This impending decision holds significant importance not only for Indian markets but also for global equities, according to Ajit Mishra, SVP – Research at Religare Broking.

Market experts highlight the India-US trade negotiations as one of the crucial triggers that could impact sectors heavily exposed to global markets such as IT, pharmaceuticals, and automobile components. The outcome of the US trade deadline on July 9 could potentially reshape global trade dynamics, setting the tone for market movements.

Additionally, the release of the US Federal Open Market Committee (FOMC) minutes on July 9 adds another layer of complexity, influencing global risk sentiment and the movement of the dollar. Investors will closely monitor these developments for cues on market direction.

The earnings season kicks off with Tata Consultancy Services (TCS) and Avenue Supermarts reporting their Q1FY26 results, which are expected to provide insights into broader sector expectations. Vinod Nair, Head of Research at Geojit Financial Services, highlights the importance of these initial results in determining market trends, especially with indices trading at elevated levels.

Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, anticipates the market to consolidate while awaiting clarity on the India-US trade deal, emphasizing stock-specific actions in the interim. Foreign institutional investor (FII) flows are expected to remain volatile, contingent on policy direction and corporate performance.

V K Vijayakumar, Chief Investment Strategist at Geojit, emphasizes the significance of a potential trade deal between India and the US and positive Q1 FY26 results as catalysts for FII buying. However, any disappointments on these fronts could adversely affect market sentiment.

As investors reflect on the past week’s market performance, marked by a decline in both the BSE Sensex and Nifty 50, the upcoming week may continue in a consolidation phase with stock-specific actions driving market movements.

Apart from policy and earnings updates, market watchers will closely monitor Brent crude price trends, rupee-dollar fluctuations, and US macro data releases, all of which could influence market sentiment and liquidity.

With critical tariff deadlines, the onset of the earnings season, and uncertain FII flows, the upcoming week carries significant importance for Indian equities. Investors are advised to exercise caution, focusing on fundamental earnings performance and awaiting clarity on key developments from New Delhi and Washington.