Nifty99000 100%

Sensex99000 100%

Exclusive

US-China trade war resumes

Author: Veeresh Hiremath/Wednesday, May 15, 2019/Categories: Exclusive

Rate this article:
No rating
US-China trade war resumes

After a lull of more than two months after the end of deadline on March 1, 2019 on a temporary truce of 90 days on imposition of additional tariff, US President Donald Trump increased the tariff from 10 per cent to 25 per cent on USD 200 billion worth of Chinese goods with effect from May 10, 2019.

This increase was implemented in the midst of trade negotiation meeting between Chinese Vice Premier and US Trade Representatives. Soon after the tariff implementation, the global market started to react wherein world equity indices tumbled to multi-week and multi month lows while safe haven assets like Japanese Yen and gold rose to multi-week highs. Further, the base metals market was also hit badly. The US President took this step to promote US industries and labour market condition, which are passing through difficult times.

In retaliation, China has also decided to increase tariffs on USD 60 billion worth of US goods. The US is the biggest market for Chinese automobile and electronic goods while China imports soybean and cotton from the US in large quantities. As a result of this, cotton prices tumbled to multi-month lows on international and domestic exchanges defying the underlying fundamental factors.

This trade tension is likely to have its ripple effect on the global financial market including commodities for a few days. Further, US President Donald Trump and Chinese Premier Xi Jinping are likely to meet next month to review the situation and try to find a possible solution.

The volatility in the Indian market is expected to intensify as the country is approaching the final phase of polling followed by the results on May 23, 2019. The global market is also eagerly awaiting India’s general election results, which would give more clarity on the direction of markets.

The author is head of research, Karvy Comtrade

Print

Number of views (655)/Comments (0)

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free