Market Watch: US-EU trade tensions lend caution to the start of the week - Geojit Financial Services Ltd
Asia
Asian stocks rose as AI optimism lifted tech shares in Hong Kong and China, while other investors stayed cautious due to US-EU tariff tensions and the ongoing war in Ukraine. Gift Nifty suggests a flat opening for Indian markets
US & Europe
The S&P 500 reached a record high last week as new inflation data indicated positive news regarding the Federal Reserve's rate cut plans, ahead of the Minutes from the Federal Reserve's January meeting and updates on manufacturing and services sector activity this week. European markets closed lower on Friday, as investors responded to the latest nonfarm payroll data from the United States.
Commodities
Oil prices dipped slightly on Friday amid hopes for a peace agreement between Russia and Ukraine, which could alleviate global supply disruptions by lifting sanctions on Moscow. However, losses were capped by a delay in the immediate implementation of U.S. reciprocal tariffs. Gold prices dropped over 1% on Friday due to profit-taking, but remained on track for their seventh consecutive weekly gain, fueled by fears of a global trade war following U.S. President Trump’s push for reciprocal tariffs.\
Events today:
Japan GDP growth rate, US Fed Harker Speech, Eurogroup meeting, US markets holiday – Washington’s birthday.
* Earnings today: ABB India.
* Exchange debut: Ajax Engineering (Mainboard), Chandan Healthcare (SME).
* Ex-date: : Oil India, Mrs Bectors Food Specialities, Campus Activewear, Dalmia Bharat Sugar and Industries (Dividend), Capital India Finance (Split)
* Alembic Pharmaceuticals has received an Establishment Inspection Report (EIR) with a classification of Voluntary Action Indicated from the US FDA for its solid oral formulation facility (F-4) at Jarod.
Nifty Outlook
Though 22800 stepped in to avert a collapse, yet again, prompting a pull back towards Friday’s close, it ended without providing enough signals towards an outright turn higher. Also, we feel, that VIX is potentially on the way up, an indication that 22800 is very likely to give away, despite a hopeful finish to the week. So far the decline from September peak along with an interim pull back ending precisely at the 50day SMA, fit perfectly within the declining channel, projecting 21800-21300 as the break down target. Opening trades will take cues from the fight back of the closing hour of Friday, as well as positive oscillator divergences in short term periodicities, but it would require a push beyond the 23000-23300 band to avert an imminent drop.
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