NEW YORK, N.Y. – US and European stocks fell sharply overnight, including the Asian stock market during the early trades on Tuesday.
At a time when the market was still anxiously waiting and hoping for the developments on the trade discussions between the US and China, US President Trump’s decision to reinstate the tariffs for all the steel and aluminum US is importing from Brazil and Argentina has spoiled the market on Tuesday.
All the major indices in the US, as well as in Asia, are looking vulnerable going forward. Nifty and Senses are also looking today with a decline after the sell-off in other major indices.
The Dow Jones index has already recorded a 0.96% decline, going down below the 2,800 marks and is currently testing the crucial support between the 27,600 and 27,500 range. It remains to be seen if the Dow can break out from this support zone this day or not.
The DAX index has also gone down by 2.5%, declining significantly below the 13,100 value, signaling a downside breakout from its current sideways range. The index can get strong support between the 13,050 and 13,100 range, but below that is looking bearish for the DAX.
Nikkei index in Japan has also declined by 0.86%, failing to sustain over the 23,500 value and is expected to fall between the 23,000 and 22,800 before the trading day ends. The bullish view for the Nikkei to reach 24,000 is looking a bit delayed.
Shanghai index, although recorded a 0.39% decline, has remained under the 2,900 points. Despite the index remaining under the 2,900 mark, the outlook of revisiting a low of 2,800 is bearish for the Shanghai index.
The domestic market on Tuesday might take cues on the sell-off in the global equities. The Nifty, which has already recorded a 0.07% decline, is looking to break the 11,970 support going down to 11,900 or even lower. The Sensex index, on the other hand, has gained 0.02% but is also looking to break the immediate support of 40,500 level and falling towards 40,250 or 40,000 today.
On the other hand, the Dollar index has sharply edged lower as well, going down below the resistance level of 98. The sharp decline of the dollar followed the published ISM manufacturing PMI data for November, which showed a drop to 48.1 compared to the 48.3 market expectation.
The Dollar-Yen pair has also broken from the crucial resistance of 110. It could fall towards 109 near term, while the Euro is expected to retest the resistance if 1.11 before going down towards the 1.11 to 1.10 range.