Sensex, Nifty Seen Flat To Lower At Open

(RTTNews) - Indian shares may drift lower on Monday as investors once again grapple with capricious headlines around Donald Trump's trade regime.

U.S. President Trump has announced that import tariffs on steel and aluminum will double to 50 percent starting June 4, in what he called a move to protect domestic industry.

The direct impact is expected to be minimal for India but it could affect global trade sentiment and demand.

Market participants may also monitor developments with U.S. federal tax-and-spending legislation that threatens to burgeon U.S. deficit.

On the positive side, official data showed the Indian economy grew at a better-than-expected rate of 7.4 percent in Q4 of FY 2024-25.

The first and second advance estimates, which were based on limited data, had projected 6.4 percent and 6.5 percent, respectively. Provisional estimates now peg India's GDP growth at 6.5 percent for 2024-25.

Asian markets were mostly lower this morning as trade tensions simmered and data showed Chinese manufacturing activity contracted for a second consecutive month in May.

Beijing accused the U.S. of unilaterally introducing new discriminatory restrictions and vowed to take resolute and forceful measures to safeguard its legitimate rights and interests.

The dollar edged lower in Asian trade and gold held firm above $3,300 per ounce while oil prices jumped over 2 percent amid heightened geopolitical tensions following an escalation in Ukraine's attacks on Russia.

U.S. stocks fluctuated before ending mixed on Friday as Treasury Secretary Scott Bessent said trade discussions with China had been "a bit stalled" and President Trump accused China of totally violating a tariff agreement reach last month.

The Dow edged up by 0.1 percent as data showed U.S. consumer spending increased marginally in April and the Federal Reserve's primary inflation rate, the core PCE price index, fell in April to its lowest level since March 2021.

The S&P 500 finished marginally lower and the tech-heavy Nasdaq Composite shed 0.3 percent.

European stocks closed mostly higher on Friday as falling German inflation boosted hopes for ECB rate cuts.

The pan European STOXX inched up by 0.1 percent. The German DAX rose 0.3 percent and the U.K.'s FTSE 100 added 0.6 percent while France's CAC 40 ended down 0.4 percent.