On the tariff front, India’s negotiation team has returned from the US, but discussions are ongoing. It remains uncertain whether an interim trade deal on goods will be announced by Aug. 1. India has so far maintained its red lines on market access and tariffs for the agriculture and dairy sectors. A graded tariff on some contentious items is likely, but this depends on President Trump’s approval, as he has consistently demanded full access to Indian markets.
After concluding a trade deal with Indonesia, Trump has indicated that a deal with India would follow similar lines. India also faces potential tariff pressures due to its BRICS membership and its oil imports from Russia.
Foreign investors’ open interest in stock futures has also risen to Rs 3.90 lakh crore — higher than on January 28, but slightly lower than the end of June when it peaked at Rs 4.08 lakh crore.
Meanwhile, FPIs have slowed their addition of short positions in Nifty Bank Futures. Their open interest stands at Rs 7,274 crore — much lower than during the fourth quarter and the April earnings season, when it peaked at over Rs 12,000 crore.
The slow down is also as a result of tighter delta position limits and regulatory scrutiny over FPIs’ option trading activities that has led to manipulation allegation to Wall Street’s largest high frequency trader, Jane Street. Jane Street has submitted its impounded amount and is awaiting Sebi to remove restrictions against trading.