The trade war instigated by Donald Trump, is currently unsettling global markets. US futures and Asian markets are experiencing significant downturns, and there are growing concerns that the Indian market may also open with substantial losses today.
The trade war has caused turbulence in the currency markets, with the euro, pound, and Chinese yuan weakening. The Indian rupee is also expected to face a decline today. Gold prices have shown significant volatility, while cryptocurrencies have fallen. Market volatility and uncertainty are anticipated to persist.
In the derivatives market, the GIFT Nifty closed at 23,630 but dropped to 23,390 this morning, signalling a potential sharp loss at the opening of Indian markets today.
Despite these concerns, European markets ended with marginal gains on Friday, with the Stoxx 600 index increasing by 6% in January
The US market showed mixed performance on Friday, rising initially but ending in loss after trade opened. US futures plummeted on Sunday night following President Trump's announcement of tariffs, with indices dropping by between 1.5% and 2.5%. Tariffs of 25% were imposed on goods from Canada and Mexico, and 10% on goods from China. A 10% tariff was also introduced on crude oil from Canada. Canada has retaliated with unspecified tariffs on certain US imports. The new tariffs are set to take effect on Tuesday.
In futures, the Dow Jones Industrial Average fell 1.8%, the S&P 500 decreased by 2.02%, and the Nasdaq Composite lost 2.7%, though they later pared their losses. The yield on US 10-year Treasury notes dropped to 4.565%.
Asian markets experienced declines this morning, with Japan's Nikkei falling by 2.25% and Chinese markets also showing losses.
Despite receiving applause, the Indian Union Budget was met with mixed reactions in the stock market. The indices showed fluctuating movements, ending with marginal gains and losses. The realty, FMCG, auto, consumer durables, and media sectors saw gains ranging from 3.4% to 19%, while IT, metals, and oil and gas sectors fell by approximately 1.5%.
The market believes that while the budget aims to boost consumer spending, it has fallen short in key areas such as railways, road projects, defence, housing, and the energy sector. The increase in capital expenditure is lower than inflation, leading to concerns that actual capital investment might decline. Railway stocks, in particular, fell sharply. There was also disappointment regarding the lack of anticipated changes in capital gains and stock transfer taxes.
The budget included a reduction in customs duties on imports, including two-wheelers and cars, benefiting US automakers in particular.
On Saturday, the Nifty closed 26.25 points (0.11%) lower at 23,482.15, while the Sensex rose by 5.39 points (0.01%) to close at 77,505.96. The Bank Nifty dropped 80.25 points (0.16%) to 49,506.95. The midcap index fell by 0.42% to 53,486.15, while the smallcap index rose by 0.41% to 16,979.75.
Foreign investors sold a net amount of ₹1,327.09 crore in the cash market on Thursday, while domestic funds and financial institutions bought a net amount of ₹824.38 crore.
Despite the overall market uncertainty, the broader market remained relatively buoyant. On the BSE, 2,030 stocks advanced while 1,884 declined. On the NSE, 1,419 stocks gained and 1,328 lost.
Nifty may find short-term support at 23,360 and 23,285 today, with resistance at 23,600 and 23,670.
A number of companies are set to release their third-quarter results today, including Powergrid, Aditya Birla Capital, GIC, Divis Laboratories, Alembic Pharma, Barbecue Nation, Bombay Dyeing, Dredging Corporation, Gateway District Parks, Gland Pharma, Garden Reach Shipbuilders, Jyothi Structures, KEC International, Tata Chemicals, and Welspun Enterprises, among others.
Neogen Chemicals reported a 22.5% growth in revenue, with net profit jumping by 844%. The profit margin increased from 12.3% to 17.2%.
Anant Raj Limited saw a 36.3% increase in revenue, while net profit rose by 53.6%.
Aarti Industries' revenue grew by 6.2%, but profit fell by 63%.
Gold prices spiked to a record high following President Trump’s tariff announcement but later saw a decline. The February holiday price crossed $2,850 per ounce, and the spot price briefly surpassed $2,800. This morning, gold opened at $2,804 per ounce but fell to $2,784 due to a stronger dollar.
In Kerala, gold prices rose by ₹120 per ounce, reaching a record high of ₹61,960.
Silver prices increased slightly to $31.42 per ounce.
Following Trump’s tariff announcement, the dollar index surged to 109.66, later easing slightly, though indications suggest it may rise further, which could put additional pressure on the rupee. The dollar closed at a record high of ₹86.61 last week, with the rupee possibly facing new record lows today. The euro fell to $1.02.
Crude oil prices rose after Trump’s tariffs were extended to crude, with Brent crude up by 1% to $76.29 and WTI crude starting the week with a more than 2% increase to $74.09, before falling slightly to $73.80. UAE’s Murban crude is priced at $77.78.
Cryptocurrencies have fallen sharply, with Bitcoin losing 10% to $91,000, while Ether dropped below $2,500.
Industrial metals saw declines on fears surrounding Trump’s tariffs. Copper fell by 0.89% to $8,928.47 per tonne, aluminium dropped 1.28% to $2,592.63, and other metals such as tin, lead, zinc, and nickel also saw losses.
Sensex 30: 77,505.96 (+0.01%)
Nifty 50: 23,482.15 (-0.11%)
Bank Nifty: 49,506.95 (-0.16%)
Midcap 100: 53,486.15 (-0.42%)
Smallcap 100: 16,979.75 (+0.41%)
Dow Jones: 44,544.66 (-0.75%)
S&P 500: 4,040.53 (-0.50%)
Nasdaq: 19,627.44 (-0.25%)
Dollar (₹): 86.61 (-₹0.02)
Dollar Index: 109.63 (+1.13)
Gold (ounce): $2,804.00 (+$2.80)
Gold (gram): ₹61,960 (+₹120)
Crude (Brent): $76.95 (+$0.25)
