Negative opening likely amid rising US-China trade war concerns

The global markets present a fairly scary picture with markets across the US and Europe succumbing to selling pressure. The SGX Nifty is under pressure and indicates lower opening in store for the Indian markets. At the time of writing, SGX Nifty was trading down by 63 points at 11,475 level. Some of the key results scheduled today are Titan and Shriram Transport Finance.

Asian markets were seen declining in early trading on Wednesday following overnight sell-off on the Wall Street after the US trade representative Robert Lighthizer reiterated the US plans to raise tariffs on Chinese goods by Friday. The Japanese stock index Nikkei 225 has dropped 1.59 per cent, China’s Shanghai Composite has witnessed cut of over a per cent and Hong Kong’s Hang Seng has slipped 0.81 per cent.

Back home, it was a terrible Tuesday for the key benchmark indices with both the key benchmarks, the BSE Sensex and Nifty closing below their crucial psychological levels of 38,300 and 11,500, respectively. The benchmark indices started off the session on a firm note and, thereafter, the indices traded in a narrow range. However, in the second half of the trading session, the indices erased all of their gains and slipped into negative terrain and finally ended the day firmly lower. The broader market indices underperformed the frontline gauges with Nifty Midcap and Smallcap plunging 1.16 per cent and 0.98 per cent, respectively. Among sectoral indices, barring Nifty IT, all other sectoral indices ended in the negative terrain with Nifty Media and Nify PSU bank leading the losers.

The US stocks nosedived on Tuesday as fears about a potential trade war escalation with China rose to the surface. This was exacerbated by a US Trade official signaling that tariffs on goods from China are slated to rise to 25 per cent from 10 per cent by Friday.  The Dow Industrial Average lost 1.79 per cent, the S&P 500 edged down 1.65 per cent and the tech-heavy Nasdaq plunged 1.96 per cent.

European indices were under pressure on Tuesday and ended the session on dismal note amid trade war concerns. The European Commission has trimmed its economic growth for the Euro area for this year and the next. Also, German factory orders rose at a smaller pace than expected for March. Germany’s benchmark DAX and France’s CAC 40 indices fell 1.58 per cent and 1.60 per cent, respectively. The UK’s FTSE ended lower by 1.63 per cent.