Markets to begin in upbeat mood following govt measures to revive economy
Monday morning brings a breath of fresh air for the market participants as markets will be seen reacting to measures announced by Finance Minister such as removal of additional surcharge levied on FPIs and domestic investors. Further, the centre unveiled various measures to revive economic growth. The early trend in the SGX Nifty is indicating the bulls on the D-Street will be in high spirits and the markets may witness a gap up opening. At the time of writing, SGX Nifty was trading higher by 59 points at 10,888 level. However, as the saying goes, every rose has its thorn, and the thorn has come in the form intensifying US-China trade war which will act as a key negative catalyst and may keep the upside capped.
The Asian stock markets are seen bleeding red on Monday on the back of steep losses on the Wall Street on Friday amid escalation in the trade war between world’s two largest economies. The Japanese stock index Nikkei 225 dropped 2.27 per cent, Hong Kong’s Hang Seng has plummeted 3.50 per cent and China’s Shanghai Composite has lost 1.11 per cent.
Back home, what started as a freaky Friday turned out to be a fabulous day for the bulls as indices recovered from steep losses and ended the day on a higher note. The Nifty surged 0.82 per cent to 10,829 and Sensex rose 0.63 per cent to 36,701. The broader markets also ended the session in the green with Nifty Midcap and Smallcap surging 1.18 per cent and 0.70 per cent, respectively. On the sectoral front, Nifty Private Bank and Nifty FMCG ended in the red, while Nifty Media, Nifty Metal, Nifty PSU Bank and Nifty Auto were top gainers.
The Friday’s session turned out to be bit dramatic on the Wall Street as stocks closed sharply lower following news of deteriorating trade relations between the world’s two largest economies. The US President Donald Trump’s pledged to respond to China’s announcement of retaliatory tariffs on another $75 billion of US goods, which are expected to take place in two rounds on September 1 and December 15. Meanwhile, the most-awaited speech of Federal Reserve Chairman at the central bank’s annual gathering in Jackson Hole, Wyoming, did not disappoint Wall Street and proved sufficiently dovish on the monetary policy. The Dow plunged 2.4 per cent, the S&P 500 lost 2.6 per cent and the tech-heavy Nasdaq tumbled 3 per cent.
The European stocks ended sharply lower on Friday amid escalated trade tensions following a threat of new tariffs on $75 billion of US goods by China and President Trump's promise to retaliate. Germany’s DAX and France’s CAC 40 fell 1.15 per cent and 1.14 per cent, respectively, and UK’s FTSE 100 shed 0.47 per cent.