(RTTNews) – Indian shares look set to open lower on Monday as investors fret about an escalation of the trade war between U.S. and China and the potential impact on the global economy.
After threatening 100 percent tariffs on China from November 1, U.S. President Donald Trump sounded more conciliatory tone over the weekend, saying that everything would be fine and the U.S. didn’t want to “hurt” China.
Beijing said that it would surely take resolute measures to protect its legitimate rights and interests if the United States insists on going the wrong way.
Closer home, investors await inflation data as well as key Q2 earnings from prominent companies like HCL Tech, Infosys and Reliance Industries for direction.
Retail inflation data for September will be released on October 13, followed by wholesale inflation on October 14.
Asian markets were mostly lower this morning while the dollar steadied after falling sharply in the previous session.
Yields hovered near multi-week lows in the wake of Trump’s tariff threat and expectations of more rate cuts from the Federal Reserve.
Gold edged up to hover near $4,050 an ounce, reflecting demand for safe-haven assets amid U.S. shutdown worries, trade war concerns, and lingering fiscal and political uncertainty in countries France and Japan.
Oil prices rose more than 1 percent after settling down nearly 4 percent on Friday to the lowest since May 7.
U.S. stocks plunged on Friday in a rout that wiped out $2 trillion in market value. Markets sank as President Trump accused China of “becoming very hostile” and threatened to impose an additional 100 percent tariffs on imports from China from November 1 against the country’s expansion of export controls on rare earths.
Also weighing on markets, a survey showed Americans are concerned about jobs prospects and high inflation.
Trump’s tariff threat came after China added new port fees on American ships and launched an antitrust investigation into Qualcomm (QCOM).
Trump said he would no longer meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation forum in South Korea, because “now there seems to be no reason to do so.”
The S&P 500 tumbled 2.7 percent in its largest sell-off since April, when the stock market was reeling from the shock of Trump’s initial tariff announcement. The tech-heavy Nasdaq Composite lost 3.6 percent and the narrower Dow slumped 1.9 percent.
European stocks also tumbled on Friday after a last-minute sell-off sparked by trade concerns and France’s deepening political crisis.
The pan-European STOXX 600 gave up 1.3 percent. The German DAX and France’s CAC 40 both lost around 1.5 percent while the U.K.’s FTSE 100 shed 0.9 percent.
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