The global markets are currently moving in response to the trade war stance of US President Donald Trump. Yesterday, Trump announced some relief measures for neighbouring countries and automobile manufacturers. The Indian market surged yesterday, anticipating easing in the trade situation.
Today's market activity will depend on the outcomes of the discussions led by India's Commerce Minister Piyush Goyal in Washington. The price of crude oil has dropped below $70, which provides some relief to India. The dollar index has also significantly declined, which will assist the rupee.
In the derivatives market, the Nifty gift surged to 22,441 on Wednesday, and this morning it reached 22,460. This suggests that the Indian market will open on a positive note today.
European markets made substantial gains on Wednesday. The expectation that Trump will not maintain a hard stance in the trade war boosted the markets. Germany decided to relax conditions and significantly increase defence spending, as well as create a €50 billion infrastructure development fund, which pushed German stocks up by 3-4%, with Deutsche Bank rising by 12.4%. The euro also gained, and this move is expected to help Germany recover from recession.
The US market gained on Wednesday. The market initially fell but rebounded after Trump decided to extend the tariff relief for vehicles by another month. There is now an expectation that Trump will intensify his measures in other sectors. Reports suggest that Trump is considering excluding agricultural imports from Canada and Mexico from tariffs.
On Wednesday, the Dow Jones index rose by 485.60 points (1.14%) to close at 43,006.60. The S&P 500 index increased by 64.48 points (1.12%) to close at 5,842.63, and the Nasdaq Composite index gained 267.57 points (1.46%), ending at 18,552.70.
This morning, US futures are slightly lower. The Dow Jones is down by 0.11%, the S&P 500 is down by 0.19%, and the Nasdaq is down by 0.34%.
Two ports in the Panama Canal were acquired by American investment company BlackRock from Hong Kong billionaire Li Ka-Shing’s Hutchison. This deal was reportedly facilitated by President Trump. It is expected that Trump will abandon efforts to take back control of the canal.
Asian markets have been mixed today. The markets in Japan and South Korea rose by more than half a percentage point, while the Australian market declined by about half a percentage point. Markets in Hong Kong and Chinese stocks are in positive territory.
On the expectation of a relaxation in Trump’s trade war stance, the Indian markets surged yesterday. The Nifty 50 and Sensex both rose by over 1% after 10 consecutive days of declines. The Mid Cap index rose by 2.5%, and the Small Cap index gained 3%.
Sectors such as metals, banking, finance, media, automobiles, IT, FMCG, healthcare, pharma, oil & gas, consumer durables, and real estate all saw gains. Adani Group stocks surged by up to 10%.
The Nifty closed up by 254.65 points (1.15%) at 22,337.30, and the Sensex gained 740.30 points (1.01%), closing at 73,730.23. The Bank Nifty rose by 254.75 points (0.51%) to finish at 48,489.95. The Mid Cap index rose by 2.42% (1,160.50 points) to 49,168.35, and the Small Cap index increased by 2.96%, closing at 15,199.10.
On Wednesday, foreign investors sold ₹2,895.04 crore worth of shares in the cash market, while domestic funds and financial institutions bought ₹3,370.60 crore worth.
The buy-sell ratio in the broader market remained positive. On the BSE, 3,220 stocks rose, while 806 fell. On the NSE, 2,461 stocks gained, and 436 stocks declined.
The market sentiment has turned bullish, but any small negative news could cause a setback. The Nifty is expected to find support at 22,140 and 22,050, while resistance is likely at 22,395 and 22,470.
In the gold market, there was some profit-taking yesterday due to weaker-than-expected job growth in the US. It was expected that 141,000 new jobs would be created in February, but only 77,000 jobs were added. This caused the price of gold to dip to $2,912 per ounce. Later, it rose again, driven by better-than-expected growth in the services sector, reaching $2,922. Gold closed at $2,919.70 per ounce. This morning, it has risen further to $2,923.
In Kerala, the price of gold per gram increased by ₹440, reaching ₹64,520 for a 10-gram bar.
Silver also gained, rising to $32.73 per ounce.
The dollar continued to decline, with the Dollar Index closing at 104.30, down from 105.75. This morning, the index stands at 104.26.
The rupee strengthened against the dollar, closing at ₹86.96, a drop of ₹0.31. US Treasury bond prices also fell, pushing yields higher. The 10-year Treasury yield increased to 4.286%.
Crude oil prices continued their decline. The Organisation of Petroleum Exporting Countries (OPEC) has decided to increase production in April, and there is speculation that sanctions on Russia may be eased.
There is concern that the trade war could hurt global growth, which is contributing to the price decline. Prices may continue to fall. On Wednesday, Brent crude fell by more than 2%, closing at $69.34 per barrel. This morning, it has risen slightly to $69.68. The WTI crude price dropped to $66.67. The UAE’s Murban crude is trading at $70.40.
Cryptocurrencies surged again yesterday. Bitcoin rose by 3%, reaching $90,600, and Ethereum climbed to $2,240. The price volatility in cryptocurrencies is expected to continue in the coming days.
All industrial metals, except nickel, rose on Wednesday. Copper rose by 2.77%, reaching $9,586.92 per tonne. Aluminium increased by 1.57% to $2,658.50, while tin rose by 0.01%, lead by 0.26%, and zinc by 1.04%. Nickel fell by 0.58%.
India’s Commerce Minister Piyush Goyal is currently in Washington, engaging in discussions seeking relief from the US tariffs on various goods. The discussions will clarify which items India should reduce or remove tariffs on. The US administration is asking India to remove tariffs on cars, bikes, pharmaceuticals, and to simply label tariffs on agricultural products. After a discussion with US Secretary of Commerce Wilbur Ross, Trump had mentioned in a speech in Congress that India applies 100% tariffs, and retaliatory tariffs would come into effect on April 2, which was disappointing. However, the Indian market responded positively despite this setback. It is expected that an official statement regarding Goyal’s talks will be made today.
Trump’s 25% tariff on steel and aluminium imports will be implemented next Wednesday. Tariffs on pharmaceuticals and other products are expected to take effect on April 2.
Last year, India exported goods worth $87.4 billion to the US, while it imported $41.8 billion. The US trade deficit with India amounted to $45.7 billion.
Sensex: 73,730.23 (+1.01%)
Nifty 50: 22,337.30 (+1.15%)
Bank Nifty: 48,489.95 (+0.51%)
Mid Cap 100: 49,168.35 (+2.42%)
Small Cap 100: 15,199.10 (+2.96%)
Dow Jones: 43,006.60 (+1.14%)
S&P 500: 5,842.63 (+1.12%)
Nasdaq: 18,552.70 (+1.46%)
Dollar: ₹86.96 (-₹0.31)
Dollar Index: 104.30 (-1.44)
Gold (per ounce): $2,919.70 (+$2.00)
Gold (per 10g): ₹64,520 (+₹440)
Crude (Brent): $69.34 (-$1.70)
