Indian markets are anticipated to open on a subdued note on Monday, following significant declines in the S&P 500 and Nasdaq on Friday—their most substantial one-day drops in two weeks. Nonetheless, prevailing optimism from other Asian markets could mitigate these losses somewhat.
Investor sentiment will likely be guided by Foreign Institutional Investor (FII) flows, alongside fluctuations in U.S. bond yields and oil prices, as the week unfolds.
In Asia, markets traded predominantly higher this morning, ahead of China's announcement of its loan prime rate and the release of Japan's inflation data. The U.S. dollar strengthened against the yen, while gold prices bounced back from their sharpest weekly fall since 2021. Meanwhile, oil prices edged upward following intensified hostilities between Russia and Ukraine over the weekend.
On Friday, U.S. stock markets saw steep declines, with the 10-year Treasury yield reaching its highest level in six months. This was in response to recent economic indicators related to inflation and retail sales, along with statements from senior Federal Reserve officials, including Chair Jerome Powell, which collectively weakened the argument for a potential rate cut by the Federal Reserve in December.
Earlier data revealed that retail sales surged in October, signaling robust economic momentum as the holiday shopping season approaches. Additionally, unexpected increases in both import and export prices fueled concerns about persistent inflation.
The tech-focused Nasdaq Composite tumbled 2.2%, the S&P 500 fell by 1.3%, and the Dow Jones Industrial Average dropped 0.7%.
In Europe, stock markets closed lower on Friday, burdened by underwhelming corporate earnings, apprehensions over potential tariffs from Trump, and uncertainties surrounding the Federal Reserve's policy direction. The pan-European STOXX 600 retreated by 0.8%, with Germany's DAX slipping by 0.3%, France's CAC 40 declining by 0.6%, and the U.K.'s FTSE 100 edging down by 0.1%.