In the fortnight ended August 15, 2019 global markets were burdened by a series of factors, chief among them being the U.S.-China trade war and a steep drop in U.S. bond yields.
U.S. markets declined as the U.S. and China both took aggressive stands in the trade war. Later, things improved after the U.S. softened its stance, but this was overshadowed by an inversion in U.S. Treasuries, for the first time in 12 years, leading to recession fears.
European markets lost when Italy faced political instability after the ruling coalition called for fresh elections. Brexit concerns as investors anticipated snap elections further burdened the market.
Asian markets were no exception to the weakness in its global peers. The main drag was the trade dispute between the two largest economies of the world as it threatens global growth.
Indian equity markets fell in the fortnight as global factors kept them under pressure. The worsening U.S.-China trade war, multi-year-low U.S. bond yields, and Honk Kong clashes left investors a worried lot.
All the sectors except auto fell in the period as losses in domestic equity market and weak global factors burdened sentiment. Auto sector gained on expectations that the Government could take measures to help the sector deal with production cuts and job losses due to declining sales.
Gold prices increased as the yellow appeal was heightened by the trade war tensions and the political unrest in Hong Kong. Crude oil dip as the trade dispute led to slowing global growth worries.
The rupee weakened following escalating trade tension between the U.S. and China, losses in the domestic equity market and ongoing protests in Hong Kong and political uncertainty in Argentina.
Source: MFI Explorer
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