(fxcue news) - Indian shares look set to open lower on Friday after two days of strong gains. A cautious undertone may prevail due to persistent uncertainty around U.S. tariffs, with the Trump administration's reciprocal tariffs starting April 2 expected to impact India's export sectors, possibly leading to $7 billion annual losses. Also, it is feared that tariff-induced inflation amid slower growth could bring the U.S. economy dangerously close to stagflation. Benchmark indexes Sensex and Nifty jumped around 0.8 percent and 0.9 percent, respectively on Thursday to extend gains for a second day running. The rupee fell by 6 paise to settle at 87.12 against the dollar, snapping its three-day rally, pressured by dollar demand from importers and persistent foreign fund outflows. Foreign institutional investors remained net sellers and offloaded shares worth Rs 2,377 crore on Thursday while domestic institutional investors were net buyers of shares to the extent of Rs 1,617 crore, as per provisional data. Asian markets were mostly lower this morning, though regional losses remained capped somewhat after Chinese Finance Minister Lan Fo'an said the government has ample fiscal policy tools and space to respond to possible domestic and external challenges. Treasuries edged up slightly after a muted session on Thursday. The dollar index slid for a fifth session, marking its longest losing streak in almost a year. Gold ticked lower but was on track for a weekly gain ahead of the release of U.S. payrolls data later in the day. Oil edged up slightly but was on track for its biggest weekly decline since October on tariff-related worries and fears of oversupply in the market. U.S. stocks fell sharply overnight, with the tech-heavy Nasdaq officially entering into correction territory on the mixed messaging coming from the White house and renewed concerns about spending on artificial intelligence as China doubles down on AI and tech innovation. The U.S. trade deficit widened to a record high in January amid front-loading of imports ahead of tariffs, suggesting that trade could be a drag on economic growth in the first quarter. The Nasdaq Composite and the S&P 500 plummeted 2.6 percent and 1.8 percent to reach five and four-month closing lows, respectively amid worries that President Trump's much-vaunted policy of trade tariffs will hurt domestic growth. The narrower Dow lost 1 percent. European stocks ended mixed on Thursday as the European Central Bank reduced interest rates by 25 basis points, as widely expected, and signaled more cuts may be in store. The pan European STOXX 600 finished marginally lower after a choppy session. The German DAX rallied 1.5 percent amid ongoing optimism for a massive increase in public spending in the country. France's CAC 40 edged up by 0.3 percent while the U.K.'s FTSE 100 shed 0.8 percent.