Recession worries weigh on global markets as China export growth hits two-year low

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London, May 9 | Recession worries are swirling again as China’s Covid-19 lockdowns, the Ukraine war, and the cost of living crisis all threaten the global recovery, The Guardian reported.

China’s exports growth has tumbled to a two-year low, as the curbs introduced to battle Covid has hit factory production, disrupted supply chains and weakened domestic demand too, The Guardian reported.

Exports slowed to 3.9 per cent year-on-year in April, the weakest since June 2020.

Imports growth was flat (and imports from the US dropped by 1.2 per cent), as cities such as Shanghai were shut down to fight virus outbreaks.

April’s data shows the impact of China’s latest Covid restrictions, including the tight lockdown in Shanghai which have lasted six weeks, disrupting the operations of companies including Tesla and Apple.

Julian Evans-Pritchard, senior China economist at Capital Economics, says weakening foreign demand hit China’s exports, suggesting rising prices are now hitting consumer spending, The Guardian reported.

The sharpest falls were in shipments to the EU and the US, where high inflation is weighing on real household incomes.

The declines were also especially pronounced in electronics exports which suggest a further unwinding of pandemic-linked demand for Chinese goods.

Shares have dropped in most Asia-Pacific markets after China’s export growth hit its lowest since June 2020, early in the lockdown.

Japan’s Nikkei led the selloff, falling 2.5 per cent, while China’s CSI 300 has dropped almost 1 per cent, Australia’s S&P/ASX 200 is down 1.2 per cent, and South Korea’s KOSPI is down 1 per cent.

Investors are worried that central bankers will keep raising interest rates to cool inflation even as the world economy slows.

Source: IANS

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Weekly Technical Share Market Outlook

Weekly Technical Share Market Outlook

The Indian market recovered sharply on the last trading day amid the weekend after a continuous fall. Market has managed to halt above 16000 Nifty levels after continuous losing streak. Index reacted violently, grasping Indian as well as global factors throughout the week. Simultaneously, Inflation is catching up and profit margins are taking a hit.

 

Sensex advanced 1532 points or 2.90 percent while Nifty gained 484 points or 3.07 percent in a week. Simultaneously, Bank nifty has overcome bear’s dominance ending the session with 3.49 percent gain. Sectorally,Nifty Metal saw the highest gains of 7.40 percent followed by the Realty and Auto added over 4% gain. On the flip side Nifty IT tumbled 2.82 percent on weekly basis. Midcap and Small Cap measures rising nearly 2 percent as well.

In Nifty stock, EICHERMOT gained 11.31% while TECHM lost 5.98% on a weekly basis. INDIA VIX closes at 23.10 suggests volatility driven market is going to remain intact. Coming to the OI Data, on the call side highest OI witnessed at 17000 Nifty followed by 16800 Nifty strike price while on the put side, the highest OI was at 16000 Nifty followed by 15800 Nifty strike price. Technically, Nifty has formed a Tweezer Bottom type pattern in the weekly chart suggesting a short term buying rally may drive the market until monthly expiry. On the daily chart, price has rebounded from the lower Bollinger band as well.

Momentum indicators MACD & Stochastic were trading with a positive crossover & reversed from oversold zone. However, Index is still struggling to get the support of 50 Simple Moving Average in daily chart. Short term investors and traders are advised to work with option strategies to neutralize the volatility. Overall, Nifty is having support at 15700 mark while on the upside 16700 followed by 16500 may act as an immediate resistance. While Bank nifty has support around 32500 while resistance is placed at 36000 on weekly chart.

Sumeet Bagadia
Executive Director
Choice Broking

Source: Choice India

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