Sensex, Nifty set for a quiet start after two-week rally as Trump's tariff threat rattles global mood

Markets brace for a jittery Monday after Trump’s tariff tantrum rattles global sentiment

After two straight weeks of gains, Indian benchmark indices Sensex and Nifty are likely to begin the week on a muted note on October 13, taking cues from weak global trends. The cautious mood comes after US President Donald Trump’s announcement of a 100 percent tariff on Chinese goods triggered a sharp selloff on Wall Street, before he later softened his stance over the weekend.

As of 7:35 am, GIFT Nifty futures were trading around 25,325, down 76 points or 0.3 percent, indicating a subdued start for Dalal Street.

Last week, the Nifty 50 index rose 1.6 percent, its best weekly performance in over 3 months. The index also hit a fresh weekly high of 25,330, marking its fifth weekly gain in the last six. However, these gains are now likely to be tested in Monday’s session.

On Friday, Trump announced that the US would impose an additional 100 percent tariff on Chinese imports starting November 1, citing that China had become “hostile” and had imposed new curbs on the export of critical software. The announcement rattled global investors, leading to a sharp fall in US markets: the Dow Jones fell 1 percent, the S&P 500 declined 0.8 percent, and the Nasdaq Composite dropped nearly 2 percent.

However, sentiment improved later as US futures rebounded from the selloff after Trump assured that trade relations with China “will all be fine.” The Dow Jones futures rose by 358 points, or 0.8 percent, while S&P 500 and Nasdaq-100 futures gained 1 percent and 1.2 percent, respectively.

Despite that, Asian markets opened lower this morning as both the US and China tightened trade restrictions and exchanged fresh accusations over the weekend. China said it was “not afraid” of a trade war with the US, signaling that tensions could escalate further.

Hong Kong’s Hang Seng index slipped 2.22 percent, while China’s CSI 300 fell 2.73 percent. Australia’s S&P/ASX 200 lost 0.68 percent. South Korea’s Kospi dropped 2.35 percent and the small-cap Kosdaq index declined 2.24 percent. Japan’s markets remained closed for a holiday.

Technical levels

Nifty is expected to face resistance at 25,400–25,450 levels, which will be critical for its next leg of upward momentum. The sharp correction in US markets on Friday may weigh on sentiment, but experts believe it is unlikely to change the broader positive trend as long as the Nifty stays above key moving averages and the midline of the Bollinger Bands.

Support for the index is seen in the 25,000–24,900 range. A drop below this level could give the bears an edge, according to market analysts.

Hardik Matalia, Derivatives Analyst at Choice Broking, said the Nifty displayed strong bullish momentum last week, rising 391 points and forming a bullish candle — marking its second consecutive week of gains. “Immediate resistance is seen at 25,500, followed by 25,600 and 25,850, while support is placed at 25,150 and then 25,000. A breakdown below 24,900 could trigger further downside pressure,” he said.

F&O cues

In the weekly options data, the 26,000 strike has the highest Call open interest with 1.25 crore contracts, suggesting it could act as a strong resistance level for the Nifty in the near term. Heavy Call writing was also seen at the 25,450 strike, which added 32.41 lakh contracts, followed by the 25,650 and 25,350 strikes.

On the Put side, the 25,200 strike holds the maximum open interest of 1.37 crore contracts, making it a crucial support level. The 25,300 strike saw the highest Put writing, adding 86.14 lakh contracts, followed by the 25,250 and 25,200 strikes.

The Nifty Put-Call Ratio (PCR), which reflects market sentiment, rose to 1.32 on October 10 from 1.06 in the previous session, indicating a slightly bullish bias.

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