Hello MarketShalians, Welcome to today’s World Economy Actions and Its Impact financial blog at MarketShala. Let us take a look at what major buzz related to the economic actions are taking place in the country and the world and what impact they are going to have.
Table of Contents
Trump’s Fed Criticism Sends Dollar to Multi-Year Lows
The U.S. dollar weakened on Tuesday, dropping to multi-year lows against the euro and Swiss franc, and declining against the yen, as President Donald Trump’s criticism of the Federal Reserve sparked concerns over the central bank’s autonomy.
Markets Surge on US-China Tariff Optimism; India Eyes Gains Amid Kashmir Tensions
US stocks rose sharply after Scott Bessant’s statement that the tariff war with China will be resolved soon and that too many tariffs are not sustainable. Markets rallied on this, gold prices fell and the US dollar rose. Trump then stepped back once again this term. He said he does not plan to fire Federal Reserve Chairman Jerome Powell and indicated that tariffs on China could be reduced, which relieved investors who were scared by the White House’s aggressive moves in recent weeks. The market took a breather from the risk. How sustainable it will be is a controversial question, but fragile markets will do what they can.
Indian markets will be buoyed by US moves and improvement in sentiment. Indian futures are pointing towards a gap up this morning, but be cautious as markets are moving on statements from US officials and not on global fundamentals. The IMF’s recent GDP projection has reduced the global economic growth forecast and trimmed India’s expected growth for FY2026 by 30 basis points.Please note that in the last 4 major crises, IMF’s first cut was 50 bps more optimistic for the global economy. Whatever happens, India remains a relatively bright spot globally. Change in flows coming from FPIs who have been net buyers for the last few days is providing more momentum. We are seeing a 7th day rise in the Indian market, with some sector rotation possible, with IT being a possible new leader as any kind of normalcy in the US will push IT to be preferred again. The bigger risk is on the borders, with Indian action on Pakistan based terrorists possible in the next few days. The mood in India has turned somber following the terrorist attack on tourists in Kashmir.
Gold Falls as Trump Softens on Fed, Musk Ends White House Stint
Elon Musk said he will step down from the White House DOGE office after spending three months trying to fundamentally transform the federal government and its workforce. “Starting next month, I will allocate most of my time to Tesla,” Musk said during Tesla’s earnings call on Tuesday, adding that “the major work of setting up the Department of Government Efficiency” was complete. He mentioned that he would dedicate one or two days per week to government matters “as long as it’s beneficial,” and the president has expressed support for this.
US Treasury Secretary Scott Bessant said he believes US-China trade tensions will ease, but talks with Beijing have not yet started and will be “slow.” Gold prices fell on Wednesday as US President Donald Trump backed off his threats to sack Federal Reserve Chair Jerome Powell and raised hopes for a trade deal with China, easing bullion’s safe-haven appeal.
Asian Markets Rise on US-China Trade Hopes and Oil Gains
Asian stock markets gained on expectations of a reduction in US-China trade tensions. Oil prices rose early in the Asian session on positive sentiment. The sentiment has been driven by the Trump administration’s talks of getting closer to trade deals with India and Japan and the current standoff between the US and China becoming untenable, while further sanctions on Iran could worsen the supply outlook.
HSBC India Composite Index Hits 60 in April, Fastest Growth in 8 Months
HSBC Flash India Composite Output Index reaches a robust 60 in April. The seasonally adjusted index – measuring month-on-month change in the combined output of India’s manufacturing and services sectors – highlighted the fastest rate of expansion since August 2024.
Pranjul Bhandari, HSBC’s chief India economist, stated that new export orders saw a significant increase, likely due to the 90-day suspension of tariff implementation. As a result, output and employment increased for both manufacturers and service providers. Cost inflation remained consistent with March, but the rate of price increases accelerated slightly, leading to improved margins.”
Private sector firms recorded a record rise in new export orders during April amid good demand from Africa, Asia, Europe, the Middle East and the Americas. Manufacturers experienced a faster pace of growth compared to service sector companies, marking the strongest increase observed in the past 15 years.
China Refuses to Negotiate Under U.S. Threats, But Leaves Door Open for Talks
However, China reaffirmed that it will not negotiate under the White House’s constant threats. “China’s attitude towards the tariff war launched by the US is very clear: we don’t want to fight, but we are not afraid of it either. If we fight, we will fight to the end; Manufacturers experienced a faster rate of growth compared to service providers, marking the most significant expansion in 15 years. While Chinese officials have used similar words before when discussing the possibility of trade talks with Trump, the recent comments from Beijing and Washington taken together appear to be part of efforts to break out of the recent cycle of tensions. Wednesday’s remarks came after Trump said he was not going to “treat China hard”, and that the two countries would eventually reach a trade deal.
Bessant Signals Easing US-China Tensions, Global Stocks and Bitcoin Surge
Treasury Secretary Scott Bessant expressed hope that the trade conflict with China will ease during a closed-door meeting with JPMorgan investors on Tuesday, according to sources familiar with his remarks. China signaled it is open to dialogue and trade talks with the U.S., a day after President Trump said he was willing to cut tariffs on Chinese goods. The expression of openness to a deal from both sides marks a shift from last month, when the world’s two largest economies hiked tariffs and exchanged harsh words, helping push stock markets around the world to their worst week in several years. Even if the U.S. and China return to the negotiating table, few expect the two countries’ economic tensions to be resolved quickly. Publicly, Beijing has insisted that the White House ease its attacks on China to lay the groundwork for negotiations. Fragile markets have clutched at straws and stocks from the U.S. to Asia and Europe have rallied. Bitcoin heads toward $95,000, rising for a third day and setting a positive tone for the year.
Conclusion and disclaimer
The content on MarkShala.com is intended for educational and informational purposes only. We specialize in writing blogs on financial planning, investment strategies, economic trends, and related topics. While we strive to provide accurate and reliable information, the content should not be taken as professional financial, investment, or legal advice.
80% of Indians are NOT covered with proper Advisory for Wealth Creation, Right Insurance Protection and Financial Help!
Don’t be a part of the herd — take the first step and lead the way. Book a FREE call with MarketShala (WhatsApp – +91-8209177236 or Write at somnath@markshala.com) to learn more about the art of Right Investing, Insurance and find the best solution for you and your family.
Click Here and start your journey to invest in your first crypto currency.
Click Here and start your journey to invest in your first Stock, Index, Commodity and move ahead with your wealth creation journey.
How did you like our blog? Do share your thoughts in the comment box. Your thoughts will inspire us to bring more good and relevant content for you so that we can enhance the quality of our content and you can benefit more.
Thank you for tuning in to MarketShala’s Fin Dose — your essential source for insights into the financial markets, India and global economy, Don’t forget to share this story on your network.
Explore More on MarketShala Stay updated with insights on global events, market analysis, and investment strategies on Markshala, where we aim to make financial education accessible and actionable.Now, let’s shift gears and unwind! Treat yourself to the soothing tunes of MuziMuffin with his latest release available on Spotify, YouTube and Apple Music. Relax, recharge, and enjoy the vibe!
***********
|| ॐ नमः शिवाय ||