Market Volatility Expected Amid US-China Trade Tensions
Equity markets are bracing for a turbulent week as investors keep a close eye on the escalating trade conflict between the United States and China. With significant quarterly earnings reports from major Indian companies like Wipro and Infosys on the horizon, analysts predict that market sentiment will be heavily influenced by global economic indicators and foreign investor activity. The upcoming week will be shortened due to public holidays, adding to the uncertainty.
Impact of US-China Trade War
The ongoing trade war between the US and China has intensified, leading to heightened volatility in both global and Indian markets. Following a sweeping tariff plan announced by US President Donald Trump in early April, both nations have retaliated with significant tariffs on each other’s goods. While the US has paused reciprocal tariffs for most countries, China remains excluded from this reprieve. In response to US tariffs, China has imposed a staggering 125 percent tariff on certain US imports, further complicating the trade landscape.
Puneet Singhania, Director at Master Trust Group, emphasized that the upcoming week will be crucial for market dynamics. Investors will be closely monitoring developments related to the tariff situation, as well as key economic data releases from the US, UK, and China. The focus will also be on domestic inflation figures, including the Wholesale Price Index (WPI) and Consumer Price Index (CPI), which are expected to influence market sentiment.
Corporate Earnings in Focus
As the holiday-shortened week progresses, the spotlight will shift to corporate earnings reports from major players in the Indian market. Companies such as Wipro and Infosys from the IT sector, along with banking giants HDFC Bank and ICICI Bank, are set to announce their quarterly results. Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd, noted that these earnings will be pivotal in shaping investor sentiment amidst the ongoing volatility.
Last week, the domestic markets experienced modest losses, with the BSE Sensex declining by 207.43 points, or 0.27 percent, and the NSE Nifty falling by 75.9 points, or 0.33 percent. The uncertainty surrounding corporate earnings, coupled with the global trade tensions, is likely to keep investors on edge.
Economic Indicators and Market Sentiment
Market sentiment in the coming week will also be influenced by various economic indicators, including the rupee-dollar exchange rate and Brent crude oil prices. Analysts predict that fluctuations in these areas could further impact investor confidence and trading activity. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, stated that the Indian markets are expected to remain volatile, closely tracking global cues and developments related to the US tariffs.
A report from Bajaj Broking Research highlighted that significant economic data releases from major global economies are anticipated this week. These data points are expected to guide market sentiment and influence monetary policy expectations, adding another layer of complexity to the trading environment.
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