Rupee near a six-week low and Sensex sensitive to global risks

Rupee is near a six week low, and Indian benchmark indices, Sensex and Nifty, are off to a tentative start, opening lower for the fourth day in a row. The indices of mid and small-cap stocks are down for the ninth day in a row. Both global risks and local fears are keeping buyers at bay.

Stemming the losses in India is a slide in crude oil prices, which posted their biggest fall this January in the New York exchange. India, which is a net importer of crude oil, benefits from the fall as cheaper crude oil preserves the country’s dollar reserves and keeps inflation in check.

Global markets are fearing the worst kind of fallout in the trade talks between the US under Donald Trump and the Xi JInping’s China. This, after the US charged the Chinese telecom firm Huawei with bank fraud and for conspiring to steal trade secrets, according to Reuters. This is expected to derail the potential for a truce between the two countries that are on the verge of a full-blown trade war.

In India, the futures and options series for January will expire tomorrow. With the global risks rising, traders are unlikely to exit any risky bets that are open right now.

Indian equity markets are already at their lowest point this month.There are enough jitters at home, most of it all is the fear around the financial sector and a possible contagion.

In the last few weeks, global markets recovered from the hammering in December, hoping that the world’s two largest economies do not wage a trade war that would bring the world to a grinding halt.

However, this month-long global rally may be overdone. “Maybe the bull ride since Dec. 24 has not gone a full ‘8 seconds’ but we’d look to dismount anyway—we’re close enough and bulls can be dangerous animals,” he said in a report, referring to the number of seconds a bull rider is required to stay on to earn a score for a ride,” Morgan Stanley’s chief equity strategist Mike Wilson has reportedly said.