Trade War Fears Infuse Volatility In Global Markets

The market witnessed lot of action in the past couple of weeks, while the Sensex witnessed a rejig in its constituents. The weightage of pharma stocks and IT stocks is seen coming down post the rejig. With the weightage of defensives coming down in the Sensex, the volatility is expected to increase in the key benchmark index. 

The global equity markets saw heightened volatility owing to the fears of a full blown trade war. The increasing trade sanctions levied by the US and China on each other’s products promise to introduce fresh bout of uncertainty in the markets. 

Mid-cap index gained 2 per cent, while the Small-cap index was up by 1 per cent during this period. Among the sectoral indices, the IT index was the best performing index in the past couple of weeks, followed by Auto and Realty indices, which were up by 2 per cent each. Bankex was up by 1 per cent and FMCG gained 1 per cent. 

Indian markets managed to inch up in line with the global markets in the past couple of weeks. Both Sensex and Nifty recorded gains of two per cent. The Mid-cap index gained 2 per cent, while the Small-cap index was up by 1 per cent during this period. Among the sectoral indices, the IT index was the best performing index in the past couple of weeks, followed by Auto and Realty indices, which were up by 2 per cent each. Bankex was up by 1 per cent and FMCG gained 1 per cent. The Metal index was the worst performing and was down by 3 per cent during the period. Power index was the other index that reported negative gains and was down by 1 per cent 

The global indices were seen inching up over the last couple of weeks with S&P 500 taking the lead by gaining 2 per cent. The NASDAQ was the other US index which was up by 2 per cent. Dow Jones Industrial Average (DJIA) managed to close flat during the period. The European indices mostly closed in the red with DAX being the exception. The FTSE was down by 2 per cent and CAC 40 slipped by 1 per cent. DAX managed to close flat. The Asian indices were down, with the exception of Nikkie, which was up by 1 per cent, while Hang Seng and Shanghai lost 2 per cent. The FIIs were net sellers to the tune of `6877.73 over the last fifteen 

Gold was seen inching up in the last fifteen days. The gold prices firmed by almost 0.50 per cent in past couple of weeks. The crude oil price was up by 0.26 per cent over the last fifteen days. days, while the DIIs were net buyers to the tunes of `7207.99 crore during the same time frame. 

In the coming weeks, markets are expected to trade lacklustre in the absence of any positive trigger. Market participants will be closely watching the developments on the global front, such as fresh trade sanctions and moves by the central banks on their interest rates.