Brace yourself for global weakness today

The weakness of the preceding two trading sessions is likely to exacerbate with the bears tightening their grip as the US President, Donald Trump, said that he plans to reinstate tariffs on metal imports from Brazil and Argentina. This move, most likely, would ruin previous terms with these countries and amplify a global trade war that the president had appeared ready to scale back. At the time of writing, the SGX Nifty was down by 7 points and trading at 12,084 levels. Technically, the zones of 11,970-12,000 is a make or break level for the index. A decisive close below this zone would be worrisome for the bulls.
 
Weaker western markets will have an impact on peers across the world. The first signs are already visible in the Asian markets. The Asian markets are trading in red on Tuesday morning, with Japan’s Nikkei 225 trading lower by 0.88 per cent, Hong Kong’s Hang Seng is down by 0.48 and China’s Shanghai Composite has dropped 0.47 per cent.
 
Back home, the markets saw a brilliant start on Monday morning, defying weak macro data which were released on Friday after the closing of the markets. However, they took a U-turn and shed all its gains soon. Thereafter, the markets oscillated in a narrow range and ended the session on a divergent note, with the BSE Sensex closing at an increase of 0.02 per cent and the Nifty losing 0.07 per cent. The selling pressure was intense in the broader markets, with Nifty Midcap and Smallcap losing 0.69 and 0.90 per cent, respectively. On the sectoral front, Nifty IT was the only gainer. While on the flipside, Nifty IT, Nifty Auto,  and Nifty PSU Bank were the top decliners.
 
In overnight developments, stocks ended lower on Wall Street after the ISM manufacturing showed that the US manufacturing activity contracted further in November. Further, the sell aggravated when President Trump said that he would impose tariffs on steel and aluminum from Brazil and Argentina, after accusing the countries of a massive devaluation of their currencies that hurt US farmers. The Dow closed a good 1 per cent below its previous close while the S&P 500 was down 0.9 per cent. The worst-hit was the NASDAQ, which ended lower by 1.1 per cent. The European stocks too have followed their US counterparts and logged losses for the third consecutive days as the move, which was announced by President Trump to reimpose tariffs on imports of steel and aluminum from Brazil and Argentina, hit markets hard.