Markets may begin on a cautious note tracking negative global cues

Today, the markets are likely to make a cautious start amid negative global cues. Around the globe, investors are nervous about the possibility of an escalating trade war between the world’s two largest economies, US and China. On the domestic front, market participants will keep a close watch on the rupee and the bond yields. On Monday, the major reasons for the fall in the Indian markets were a weak rupee as it closed at a record closing low of 71.21 against dollar and the 10- year bond yields, which closed at four-year high of 8 per cent, reflecting market fears that the RBI may be preparing for another rate hike. The SGX Nifty suggests that the Nifty could open lower by 2 points around the level of 11,628.  
  
Asian markets are trading in the red in early trading on Tuesday as market participants are nervous of the high possibility of escalation of the US-China trade war. Japan’s benchmark Nikkei 225 index has lost 0.69 per cent, Hong Kong’s stock market Hang Seng has slipped 0.64 per cent; and China’s Shanghai Composite has shed 0.17 per cent.  
  
Back home, Monday turned out to be a dismal day of trading for Indian equity benchmarks, with the frontline indices Sensex and Nifty ending below their crucial 38,400 and 11,600 levels, respectively. After beginning the day on a positive note, markets gave away most of the opening gains and started trading in a range, but the huge sell-off in the last hour of trade resulted in a negative close for the markets. The broader indices showed some resilience as they managed to limit losses with Nifty Mid-cap and Small-cap losing 0.27 per cent and 0.22 per cent, respectively. On the sectoral front, Nifty FMCG, Nifty Pvt Bank and Nifty Realty led the sell-off, while, Nifty Media and Nifty Metal ended in the green.  

On Monday, the US markets were closed for Labor Day holiday.  
  
Majority of the European markets ended the first trading session of the new month in the green. The DAX of Germany dipped 0.14 per cent, while the CAC 40 of France advanced 0.13 per cent and the UK’s FTSE 100 gained 0.96 per cent. The Eurozone Final Manufacturing PMI lost ground for an eighth straight month at 54.6, which matched the estimate and marked the lowest level since November 2016.