Mumbai: This week Indian markets are likely to be weighed down by weak global cues, while assembly election results from three northeastern states may have also have an impact on sentiment. Global markets across the US, Europe and Asia were under pressure on Friday after President Donald Trump announced upcoming tariffs on steel and aluminium which signals a potential trade war.
Trump invited a trade war after slapping tariffs on steel and aluminium imports, daring other countries to act on threats of retaliation. Trump is facing anger from manufacturers and trade partners in China and Europe after announcing tariffs of 25% on imported steel and 10% on aluminium for “a long period of time”. The formal order is expected to be signed next week.
In India, metals stocks are expected to be in focus on Monday as the hike in tariffs in both steel and aluminium will hurt those companies.
Meanwhile, election results of three northeastern states—Tripura, Meghalaya and Nagaland—were declared on 3 March. The Bharatiya Janta Party (BJP) is set to form the government in all the three states forming alliances with other parties in each state.
The ruling BJP, buoyed by its impressive performance in three state polls, and the opposition, armed with the issue of banking scam, are likely to lock horns over a number of contentious matters in Parliament which reconvenes on Monday.
Both houses of Parliament will meet after a month-long recess in the Budget Session, during which the passage of the Fugitive Economic Offenders Bill, which seeks confiscation of assets of absconding fraudsters and loan defaulters, and the triple talaq bill will be high on the government’s agenda. The bill to target economic offenders was approved by the government following the escape of diamond merchant Nirav Modi and other accused in the over Rs12,700-crore Punjab National Bank scam.
Nagaraj Shetti, technical research analyst, HDFC Securities, said he expected further weakness in Nifty, and it may go down to retest the important support of 10,300 levels this week, where one may expect emergence of minor buying interest again.
“The present range pattern (high-low range of 10,630-10,300 levels) could eventually be broken in this month, and that could possibly open up second round of sharp weakness in the Nifty. The downside target to be watched for Nifty is 9900 to 9850 levels, which could be achieved in the month of March or by April 18,” he said.livemint