Stock markets globally saw movements both bullish and bearish triggered by incredible unpredictability, which could be credited to US President Donald Trump and his head-on tariff war with world’s second largest economy- China. While this week Indian indices witnessed a Black Monday, Sensex ended 1.77 per cent at 75,157.26 level, and Nifty closed 1.92 per cent higher at 22,828.55 level. Let’s break-down the six potential triggers for stock markets ahead of the next week.
Market texture: Despite the recent rebound, the current market texture seems weak, uncertain and extremely volatile. Technically, on weekly charts, the indices formed a long bullish trend, and on the daily chart, they displayed a promising reversal formation.
Sensex Retracement support: The retracement support for Sensex was positioned at 74,200 level. Technical setup indicates that as long as the index is trading above 74,200 level, the pullback formation is likely to continue.
Nifty50 retracement support: The retracement support is positioned at 22,500 level and as long as the NSE index is trading above 22,500 level, the pullback formation is likely to continue.
Tariff effect in play: This week has been one of the most volatile periods for stock markets globally. In the latest salvo, China increased tariffs on U.S. imports to 125 per cent, hitting back against U.S. President Donald Trump’s decision to hike duties on Chinese goods to 145 per cent.
Net oil supplier status: Given India’s status as a net oil importer, lower energy prices not only ease the current account deficit but also reduce input cost pressures across sectors, thereby supporting profitability and fiscal management.
Domestic inflation levels: This trend is supportive of a stable interest rate environment and enhances real disposable incomes, which could underpin consumption recovery. Lower inflation also provides the Reserve Bank of India (RBI) with greater policy flexibility, as it positions itself incase of further accommodation being required.
