SK Stocks Close Lower on US-China Tariff Truce Uncertainty

European equity markets looked set to open higher on Monday, extending last week’s gains as investors weighed the potential impact of US tariffs on the bloc’s economy.

Attention also turned to whether the August 12 deadline for the US-China tariff truce will be extended, with reports indicating that China wants the US to ease export controls on chips for artificial intelligence as part of a trade deal.

Meanwhile, there are no major economic or earnings releases in Europe on Monday.

In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were both up about 0.2%.

European equity markets looked set to open higher on Monday, extending last week’s gains as investors weighed the potential impact of US tariffs on the bloc’s economy.

Attention also turned to whether the August 12 deadline for the US-China tariff truce will be extended, with reports indicating that China wants the US to ease export controls on chips for artificial intelligence as part of a trade deal.

Meanwhile, there are no major economic or earnings releases in Europe on Monday.

In premarket trade, Euro Stoxx 50 and Stoxx 600 futures were both up about 0.2%.

The S&P/NZX 50 index rose 0.5% to close at 12,912 on Monday, recovering losses from the previous session, driven mainly by gains in index-heavy financial stocks.

Westpac Banking, ANZ Group, and Precinct Properties all advanced between 1.2% and 2.1%.

Utilities and non-energy minerals also posted strong gains, led by Meridian Energy (+2%), Vector (+2%), and Fletcher Building (+2.4%).

However, some caution lingered amid trade risks linked to US tariffs.

Prime Minister Luxon indicated tariff relief is unlikely following the recent 15% tariff imposed on New Zealand exports last week.

Meanwhile, uncertainty over the US–China tariff truce and weak Chinese inflation data for July added risks to Kiwi exports due to close trade ties with China.

Markets also focused on US inflation data due later this week amid rising bets of rate cuts in September and December, driven by soft labor market signals.

The BSE Sensex rose 248 points, or 0.3%, to 80,098 in morning trade on Monday, attempting to rebound from a three-month low hit in the previous session, ahead of the release of domestic inflation data on Tuesday.

A Reuters poll expects India’s July inflation to fall to an eight-year low of 1.76%, dipping below the RBI’s 2%–6% tolerance band for the first time in over six years, raising hopes of potential interest rate cuts at the RBI’s upcoming meeting.

However, gains were capped by lingering uncertainty over possible US tariffs on imported goods from India.

Market participants also monitored developments ahead of a meeting between US President Trump and Russian President Vladimir Putin, scheduled for August 15 in Alaska, aimed at negotiating an end to the war in Ukraine.

Gains in the auto, banking, pharmaceuticals, and healthcare sectors mainly supported the index.

Among early gainers were Tata Motors (2.4%), SBI (1.9%), UltraTech Cement (0.8%), and NTPC (0.7%).

The Shanghai Composite rose 0.2% to above 3,640, while the Shenzhen Component climbed 1% to 11,240 on Monday, extending last week’s gains as investors awaited an announcement on whether the US-China tariff truce will be extended ahead of the August 12 deadline.

Reports indicated that China wants the US to ease export controls on chips for artificial intelligence as part of a trade deal ahead of a possible summit between Presidents Donald Trump and Xi Jinping.

On the economic front, weekend data showed that consumer prices in China were unchanged in July from the previous month, beating forecasts for a 0.1% decline.

However, producer deflation persisted for the 34th consecutive month.

Technology stocks led the rally, with notable gains from Anhui Greatwall (7.8%), Eoptolink Technology (4.8%), and Luxshare Precision (3.9%).

Benchmark equity indices Nifty 50 and Sensex are set to open on a tepid note, kicking the week off with a quiet start on Monday, August 11, as persistent tariff concerns, muted earnings, and foreign institutional investor outflows dampened sentiment.

At 7.25 a.m., the GIFT Nifty index was higher by 0.2 percent or 50 points at 24,440.

In the previous session, Nifty and Sensex slipped back into the red as lingering tariff worries dampened sentiment. Losses were broad-based, with autos, metals, IT and pharma leading the decline.

On August 8, after three weeks of consecutive selling, Foreign Portfolio Investors (FPIs) turned net buyers of Rs 1,932 crore-worth of shares, as its highest single-session buy since June 26. Their shift to net buying signals a potential reversal or at least a pause in their risk aversion toward India.

At the same time, domestic institutional investors (DIIs) net bought Rs 7,723 crore of shares, according to provisional NSE data.

Here are the key levels to watch out for in today's session

A sustained move below Friday’s low could accelerate selling pressure towards the 24,200–24,150 support zone, coinciding with the 200-DEMA and an unfilled gap. The index also slipped beneath its 100-DEMA at 24,590, adding to the hurdles for any meaningful recovery.

"Unless the index decisively reclaims 24,600, any rebound is likely to invite fresh shorting. The RSI has slipped below 40, breaking its previous lows — a sign of intensifying bearish momentum. Overall, the setup remains weak, with any pullbacks offering fresh short-selling opportunities," noted Dhupesh Dhameja of SAMCO Securities.

He added that FPIs have increased their net short futures positions to over 92 percent, highlighting persistent bearish conviction. Given the current technical and derivatives setup, a ‘sell-on-rise’ approach remains prudent, with the index likely to drift towards the 24,200–24,100 zone in the near term.

India VIX edged 2.95 percent higher to close at 12.03. Despite global headwinds, volatility remains muted, suggesting the broader market anticipates consolidation rather than a steep correction. This indicates caution is prevailing without signs of panic.

Follow our market blog to catch all the live updatesDisclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.