Markets likely to start on a subdued note tracking mixed Asian cues

Indian benchmark indices are set to open the last trading session of the week on a dull note as cues from the Asian peers are mixed. Nifty 50 index future on the Singapore stock exchange is currently trading with loss of 32 points at 10,725. The auto component maker Varroc Engineering is set to make its debut on the bourses.  

Majority of stock markets in Asia are nervous on Friday as weekend deadline approaches for the imposition of US tariffs on Chinese goods. Beijing has reportedly said that it will not fire the first shot in its trade dispute with the US, however, if the US goes ahead and imposes the proposed tariffs, China would retaliate by raising its own tariffs on American goods. Hong Kong’s Hang Seng index has slipped 0.45 and China’s Shanghai Composite has dipped 0.44%, while Japan’s Nikkei 225 index has gained 0.67%.  

Back home, frontline indices BSE Sensex and NSE Nifty  ended with a minor loss of 0.20% and 0.19%, respectively, after spending major part of the Thursday’s session in a capped and narrow range. The selling pressure was intense in the broader markets with Nifty Mid-cap and Small-cap indices tumbling 0.70% and 0.70%, respectively. Among sectoral indices, Nifty FMCG ended with gains of 1% and emerged as the top gainer and, on the other hand, Nifty Realty, Nifty Metal, Nifty Pharma and Nifty IT ended the day losing more than 1%.  

The US stock markets resumed trading after the July 4 holiday and ended Thursday’s session in the positive territory. The positive sentiment on Wall Street was seen after a report from the Institute for Supply Management showing growth in activity in the US services sector had unexpectedly accelerated in the month of June. Also, some reports suggested that President Donald Trump might offer a ‘zero solution’ to car tariffs which would see the US stop its threats to impose such duties in exchange for the European Union eliminating its levies. Meanwhile, the release of minutes from the Federal Reserve said that the incoming data suggested some business had already scaled back or postponed plans for capital spending due to uncertainty over trade policy; however, there was broad support for continued gradual rate increases. The Dow Jones Industrial Average rose 182 points to close at 24,357, the S&P added 23 points to end at 2,737 and the Nasdaq Composite Index jumped 84 points to finish at 7,586.  

The European markets closed higher on Thursday amid better-than-expected German factory orders data and easing trade concerns. The auto stocks led the gains after report suggested Trump administration might suspend threats to impose tariffs on cars imported from the European Union if the block lifted duties on the US cars. The DAX of Germany climbed 1.19%, the CAC 40 of France finished up by 0.86% and the UK’s FTSE 100 gained 0.40%.