The US Supreme Court will likely deliver its verdict on tariffs imposed by the Trump administration on US trading partners on January 14. The apex court of the US did not issue a ruling last Friday, January 9, in the case questioning the legality of US President Donald Trump’s sweeping global tariffs.
The US Supreme Court typically releases rulings around 10:00 am Eastern Time, or 8:30 pm Indian Standard Time, on opinion days.
On April 2 last year, Trump imposed tariffs ranging from 10% to 50% on almost all major economies. However, his tariff salvo was challenged in court on the grounds that the measures exceeded presidential authority under existing laws.
After slower federal courts ruled that many of those tariffs exceeded presidential authority under existing laws, the matter is now before the Supreme Court. The top court will decide whether Trump can invoke the International Emergency Economic Powers Act (IEEPA) to impose tariffs without Congress’s approval.
Can a ruling against Trump drive the Indian stock market to a record high?
Trump’s tariffs on Indian goods are among the key factors behind the heavy selloff in Indian equities by foreign institutional investors (FIIs), the weakness of the Indian rupee, and the underperformance of the domestic stock market.
Against this backdrop, could a court ruling nullifying these tariffs trigger a sharp rally in Indian equities and push the benchmark Nifty 50 to record highs?
Experts doubt it. There could be a mild sentimental impact because the market knows tariffs remain an integral part of Trump’s core strategy, and he will find ways to impose tariffs.
“It could provide some relief to the market, but the impact is likely to be limited. Even if the ruling goes against Trump, tariffs remain part of the core strategy, and alternative legal or policy routes could still be used to impose restrictions. So, at best, it may offer a minor, short-term relief to market sentiment rather than a sustained boost,” said Pankaj Pandey, the head of research at ICICI Securities.
Ajit Mishra, SVP of Research at Religare Broking, also believes it will not be a game-changer for markets.
“I doubt it will have a meaningful impact. Recent developments suggest that the administration is already prepared with alternative amendments, laws, and legislative routes to address any adverse ruling from the Supreme Court,” said Mishra.
‘If the verdict were expected to materially change policy, markets would likely have reacted in advance. At best, there could be selective or partial relief in certain areas, but it is unlikely to act as a major trigger for a market rally,” Mishra said.
At this juncture, earnings remain the primary driver for markets, alongside global developments. At this stage, corporate earnings growth is what investors are most focused on.
However, some experts hope that the Indian stock market might benefit initially from a ruling against Trump’s tariff policies, as it would reduce quite a bit of global uncertainty around trade policies.
Ravi Singh, Chief Research Officer at Master Capital Services, believes that any move that signals an ease in trade tensions is generally favored by markets and a decision of this kind could increase global risk appetite and encourage FIIs’ inflows.
Singh believes Indian equities, which have been under pressure due to concerns over higher tariffs, export delays and capital outflows, may see a relief rally because of improved sentiment.
However, Singh emphasized that while a rally is possible, it may not automatically translate into a sustained bull run.
“Investors are still going to keep an eye on global indicators like US interest rate expectations, oil prices, geopolitical risks and domestic earnings growth,” said Singh.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
