Indian Markets Remain Cautious Amid Trump’s Stance on Iran Negotiations

(RTTNews) – Indian shares are opening cautiously on Wednesday as investors balance geopolitical and trade tensions against positive global signals.

Pharma stocks may attract attention following U.S. President Donald Trump’s announcement of a phased tariff plan on imported generic medicines.

Under the proposal, generic drugs imported into the U.S. will face zero tariffs until August 2028, after which duties will rise to 100 percent and then 200 percent to encourage U.S. manufacturing.

Benchmark indexes Sensex and Nifty dropped approximately 0.3 percent and 0.2 percent, respectively on Tuesday, as oil prices stayed high despite optimism over potential U.S.-Iran peace talks resuming.

The rupee strengthened by 21 paise to close at 96.24 against the dollar, driven by strong inflows linked to the RBI’s efforts to bolster foreign exchange liquidity.

According to central bank data, banks have secured over $20.7 billion in foreign exchange inflows under the swap facility since June, offering significant structural support to the nation’s balance of payments. Analysts predict total inflows could reach $60-70 billion by the window’s closure.

Foreign institutional investors emerged as net buyers in Indian equities, purchasing shares worth Rs 1,650.16 crore on Tuesday, while domestic institutional investors acted as net sellers, offloading shares worth Rs 656.88 crore, per provisional exchange data.

Asian markets rose broadly this morning, fueled by a rebound in semiconductor shares after data revealed South Korea’s semiconductor exports surged 180 percent year-on-year in the first 20 days of July, highlighting sustained AI-driven demand.

Elsewhere, Taiwanese export orders hit a record high in June, Japanese exports rose for a tenth consecutive month, and Xiaomi raised its full-year smartphone sales forecast, bolstering investor confidence in tech and artificial intelligence-related stocks.

The U.S. dollar index remained near a one-week high, while the Japanese yen fell below 163 per dollar for the first time since 1986 as investors anticipated at least one Federal Reserve rate hike by year-end.

Gold climbed over 1 percent to $4,125 an ounce, extending gains for a fourth straight session after recovering from last week’s decline.

Oil prices advanced further after settling at a five-week high on Tuesday, as risks to global supply expanded beyond the Middle East to the Black Sea.

Brent crude futures surpassed $92 a barrel, climbing for a fourth consecutive day, as U.S. President Trump dismissed prospects for near-term talks with Iran and warned that U.S. forces could target Iran’s Pickaxe Mountain, believed to house an undeclared nuclear enrichment facility.

The threat emerged as U.S. military operations targeted military command centers, maritime assets, aircraft hangars, drone storage facilities, and logistical infrastructure.

Overnight, U.S. stocks gained momentum as semiconductor companies took center stage ahead of a wave of tech earnings reports scheduled for this week.

Industrial conglomerate 3M and automotive giant General Motors delivered better-than-expected second-quarter results, countering concerns over Middle East hostilities, inflation, and U.S. trade policy.

The S&P 500 rose 0.9 percent, ending a three-day losing streak, while the Dow gained 0.7 percent and the tech-focused Nasdaq Composite surged 1.3 percent.

European markets closed on a strong note on Tuesday, with tech and mining stocks leading the rally amid renewed diplomatic efforts to ease Middle East tensions.

The pan-European STOXX 600 increased 0.6 percent. The German DAX surged 0.7 percent, France’s CAC 40 edged up 0.3 percent, and the U.K.’s FTSE 100 added 0.6 percent.

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