Markets may open lower amid global trade tensions and growth concerns

Considering the early action in SGX Nifty and the Asian peers, it appears that the Indian benchmark indices are expected to open lower. Digging deeper, scaring the market participants the most is the global growth forecast from IMF as it cut global growth outlook amidst global trade tensions. Also, the US President Donald Trump threatened to impose tariffs on $11 billion worth of European Union (EU) products and the latest statement from the EU suggests these countries will retaliate. At the time of writing, SGX Nifty was trading around 11,709 levels down by 40 points.

Asian shares were a sea of red on Wednesday taking cues from a slump on the Wall Street overnight. This could be the result of market jitters regarding global growth as the IMF has downgraded the growth of the world economy for the year 2019 and expects the world economy to grow at just 3.3 per cent in 2019. Hong Kong’s Hang Seng has shed 0.37 per cent and the Japanese stock market Nikkei has slipped 0.69 per cent.

Back home, after swinging in the green and red zone for a predominant part of the trading session, bulls struck back in the eleventh hour of trading, flipping the topsy-turvy session to a magnificent close. The BSE Sensex and Nifty reclaimed their important levels of 38,900 and 11,650, respectively. The broader market indices underperformed the frontline gauges with Nifty Midcap and Smallcap adding 0.14 per cent and 0.08 per cent, respectively. Amongst the sectoral indices, except for Nifty Media, all other sectoral indices ended in the green with Nifty PSU Bank and Nifty Realty gaining the most.

The US stocks ended lower on Tuesday amid fears over escalation of trade tensions with the European Union, while the IMF lowered its 2019 global growth outlook, thereby adding fuel to the fire. The Dow Industrial Average dipped 0.32 per cent, while the S&P 500 index added 0.10 per cent and the tech-heavy Nasdaq closed higher by 0.19 per cent.

The European markets ended Tuesday’s session in the red as the atmosphere turned anxious with the EU threatening tit-for-tat tariffs against the US, which said it would impose tariffs of $11 billion on imports from European Union. The France’s CAC 40 closed down 0.65 per cent and the DAX of Germany lost 0.94 per cent and the UK’s FTSE 100 declined 0.35 per cent.