Sensex, Nifty May See Volatility As Tensions At Borders Escalate

(RTTNews) - Indian shares look set to open on a positive note Monday, though volatility is not ruled out as investors react to escalating tensions with Pakistan over Pahalgam attack.

In an explosive escalation of tensions, Pakistan minister Hanif Abbasi openly threatened India with nuclear retaliation.

China has stepped up its diplomatic engagement, signaling support for Pakistan and calling for an "impartial investigation."

Pakistan's Air Force (PAF) has reportedly received a shipment of China's advanced PL-15 air-to-air missiles and also activated its Swat (Saidu Sharif Airport) and Skardu (Qadri) airbases, with the Air Force conducting sorties on Sunday.

India's navy has conducted "long-range, precision offensive" missile tests on Sunday, revalidating their readiness for long-range precision "offensive" strikes.

The United Nations has urged both India and Pakistan to demonstrate "maximum restraint."

Investors may also parse mixed messages around trade. According to a Time magazine interview published Friday, U.S. President Trump said he would consider it a "total victory" if the U.S. has high tariffs of 20 percent to 50 percent on foreign countries a year from now.

Trump also said that he expects to wrap up U.S. tariff deals within the next three to four weeks. Separately, Trump told reporters aboard Air Force One that he would not drop tariffs on China unless "they give us something," adding to the confusion.

Asian stocks were mostly higher this morning, with Chinese and Hong Kong markets slipping into the red, after U.S. Treasury Secretary Scott Bessent said the Trump administration is working on bilateral trade deals with 17 key trading partners, not including China, and that Beijing will be forced to the negotiating table.

Gold fell below the $3,300 per ounce mark on a firmer dollar and Treasuries were steady, while oil prices were marginally lower in cautious trade as investors waited to see how China will support its economy.

U.S. stocks ended on a firm note Friday and logged strong gains for the week amid optimism that the worst of the tariff-induced uncertainty is over.

President Trump told Time magazine that tariff negotiations were underway with China and that Chinese President Xi Jinping had called him, but Beijing denied the claims and said "U.S. should stop creating confusion."

Investors shrugged off data that showed U.S. consumer sentiment fell to one of the lowest readings on record and long-term inflation expectations climbed to the highest since 1991 due to Trump's trade war.

The tech-heavy Nasdaq Composite rallied 1.3 percent, and the S&P added 0.7 percent to extend gains for the fourth straight session while the narrower Dow ended flat with a positive bias.

European stocks closed higher on Friday despite much uncertainty regarding Trump's trade policies.

The pan European STOXX 600 edged up by 0.4 percent, building on the week's rally. The German DAX gained 0.8 percent, France's CAC 40 rose half a percent and the U.K.'s FTSE 100 inched up marginally.