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Europe markets open: relief rally stalls, flat start eyed as caution returns

European stock markets are poised for a muted and mixed opening on Thursday, signaling that the recent relief rally fueled by easing US policy concerns may be losing steam.

After significant gains earlier in the week, investor caution appears to be returning as underlying economic and trade uncertainties persist.

Early indications point towards a flat to slightly lower open across major European bourses.

According to data from IG, the UK’s FTSE 100 is expected to edge just 6 points higher to 8,404, while Germany’s DAX is seen opening flat at 21,933. France’s CAC 40 is projected to dip 2 points to 7,475, and Italy’s FTSE MIB is anticipated to start 53 points lower at 35,942.

This lackluster outlook follows strong performances on Wednesday, where European markets joined a global upswing.

That rally was largely driven by relief after US President Donald Trump seemingly backed away from threats to fire Federal Reserve Chair Jerome Powell and hinted at potential de-escalation in the US-China trade conflict.

US stocks surged significantly on Wednesday, building on Tuesday’s gains, as these immediate concerns subsided.

While S&P 500 futures showed further modest gains overnight and Asia-Pacific markets traded mixed, the initial burst of optimism appears to be giving way to a more sober assessment in Europe.

Earnings and economic data take center stage

With the immediate focus shifting slightly from Washington’s policy pronouncements, investors in Europe will turn their attention to a busy slate of corporate earnings and economic data releases on Thursday.

Key earnings reports are expected from major players including consumer goods giant Unilever, Spanish bank Banco Sabadell, French pharmaceutical firm Sanofi, Italian energy company Eni, banking group BNP Paribas, and software company Dassault Systemes.

On the data front, crucial releases include French consumer confidence figures and updated statistics on new car registrations across the European Union, providing fresh insights into consumer sentiment and industrial activity.

Diamonds lose sparkle

Highlighting sector-specific pressures, London-listed mining giant Anglo American announced a significant cutback in diamond production.

In a trading update, the company revealed it had reduced rough diamond output by 11% to 6.1 million carats during the first quarter.

Anglo American attributed this decision to tepid demand and falling prices for diamond jewelry.

“Consumer demand for diamond jewellery in the United States over the year-end holiday season was in line with expectations, however, rough diamond demand in the first quarter remained subdued,” the company stated, explaining that middlemen remained cautious about restocking inventories due to an existing surplus of polished diamonds.

While noting tentative signs of price stabilization, Anglo warned, “ongoing macroeconomic uncertainty, in particular the impact of US tariffs, will likely result in continued cautious Sightholder purchases in the near term.”

The company reaffirmed its intention to eventually sell its De Beers diamond subsidiary “when market conditions allow,” amidst an 11% decline in its share price so far in 2025.

Bear market rally or sustainable recovery?

The sharp rebound seen earlier in the week has also drawn cautious commentary from market strategists.

Analysts at Wolfe Research, Rob Ginsberg and Read Harvey, noted to CNBC late Tuesday that “Bear market rallies are the most violent.”

While acknowledging the strong internal market breadth during Tuesday’s 2.5% S&P 500 gain, they warned that such rallies “make you a believer” but may not signify a true end to the underlying downturn.

Citing longer-term trends, they maintain a bear market stance and are looking for a “cluster” of technical signals, including the S&P 500 decisively breaking above resistance levels between 5500 and 5700 (the index closed Wednesday at 5,375.86), before confirming a sustainable shift.

Recession risks not fully priced in?

Adding another layer of caution, strategists at Deutsche Bank suggested that despite recent tariff-fueled recession fears, the market hasn’t fully factored in the possibility of an economic downturn.

“It’s clear that investors aren’t fully pricing a recession in just yet,” wrote strategist Henry Allen.

He pointed out that recent equity declines, credit spread widening, and oil price drops have been shallower than those seen in previous recessions.

Allen argued that markets likely see a recession as avoidable, especially “if the tariffs don’t come into force after the latest 90-day extension.”

However, this also implies “significant downside risks” for stocks should a recession indeed materialize.

As European markets prepare to open, the focus shifts back to fundamentals and regional developments after a brief, globally-driven relief rally appears to be pausing for breath.

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DAX Index analysis ahead of Deutsche Bank and Adidas earnings

The DAX Index has staged a strong comeback in the past few weeks and is closing in on its all-time high as European indices become a safer haven than their American counterparts. It bottomed at €18,488 earlier this month and then rebounded to its current level of €22,000.

The blue-chip index that tracks the biggest German companies has held steady as investors remain hopeful that the US will reach a deal with the European Union. Without a deal, many DAX constituents will continue paying substantial levies to sell to their American customers. 

The index has also done well as the European Central Bank (ECB) has signaled that it will continue cutting interest rates to support the economy. Stocks do well when a central bank is slashing interest rates as this usually pushes more people from the lower-yielding bonds.

Most importantly, the German DAX jumped as the government announced that it would boost spending on defense and infrastructure. 

Top DAX Index earnings ahead

The DAX 40 Index will be in the spotlight in the coming weeks as many of its constituent companies publish their financial results. 

These earnings have started well. On Wednesday, SAP, the biggest company in the index, reported strong financial results, pushing its stock higher by over ten percent.

The company said that its operating profit rose to €2.5 billion in the first quarter, while its revenue soared by 11% to €9 billion. This growth was driven by its cloud business whose backlog jumped by 29%.

The management has stated that it expects its business to continue performing well, even as tariff jitters persist. That’s because it has tools that companies need to manage their supply chains well.

More companies in the DAX Index will publish their financial results next week. Deutsche Boerse, the €58 billion giant, will be the first one to publish its numbers next week. Its numbers come as the stock has jumped to a record high, making it one of the best performers in the index. It rose to a high of €280, up by 87% from its lowest level last year. 

Deutsche Boerse stock has jumped because of the resilience of the German market even as the economy improves. Its annual results showed that the net revenue jumped to over €5.8 billion, while the EBITDA jumped to over €3.3 billion. 

Deutsche Bank, Germany’s largest lender, will release its numbers next Tuesday. Like other European banks, Deutsche Bank’s stock has jumped to $25, up by 265% from its 2022 lows. It has benefited from high interest rates and the restructuring efforts made by Christian Sewing. 

Automakers like Mercedes-Benz, Volkswagen, and Porsche will also publish their financial results next week. Their numbers will provide more information on the impact of tariffs on the business. The other top companies to watch will be Deutsche Post and Adidas. 

DAX Index technical analysis

DAX chart | Source: TradingView

The daily chart shows that the German DAX Index has performed well over the past few weeks, jumping from a low of €18,488 earlier this month to €21,760. It has formed a V-shaped recovery and moved above the 50-day and 100-day moving averages.

The index has moved above the strong pivot reverse point at €21,250 of the Murrey Math Lines. It has retested the weak, stop & reverse point. 

Oscillators like the Relative Strength Index (RSI) and the MACD indicators have risen. The stock remains above the Ichimoku cloud indicator. Therefore, the stock will likely continue soaring as bulls target the all-time high of €23,485, which is about 8% above the current level. The stop-loss of this forecast is the major S&R level at €20,000.

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From Etsy to eBay: secondhand retail stocks poised to gain as tariffs push consumers toward thrifting

The secondhand retail sector, long the domain of budget-conscious and environmentally aware Gen Z shoppers, may be poised for broader adoption as tariffs threaten to increase the cost of new goods.

Rising prices on imports, particularly apparel and electronics, are prompting consumers to consider more affordable options, potentially giving a new tailwind to the thrifting ecosystem, a report by Barron’s said.

The shift could not only benefit traditional thrift stores and online resale platforms, but also offer investors new opportunities.

Several companies—ranging from online upstarts to legacy players—are positioning themselves to tap into the expected surge in secondhand demand.

Younger generations have already embraced thrift stores — both brick and mortar and online — as a go-to shopping destination.

“Older shoppers could follow suit as firsthand product prices increase, said Sender Shamiss, CEO of ReturnPro. “”The economics of it are going to sway a lot of consumers,” she said.

Online resale platforms regain attention despite rocky IPOs

Online resellers like ThredUp, The RealReal, and Poshmark were among the earliest to attempt to scale secondhand fashion into digital marketplaces.

All three debuted on public markets in the past six years amid strong interest in the so-called “circular economy.”

However, scaling up proved difficult. ThredUp now trades at a fraction of its IPO price, as does The RealReal.

Poshmark exited the public markets entirely, selling to South Korea’s Naver for under half its debut valuation.

Despite these setbacks, investors are reconsidering the sector.

The ongoing US-China trade dispute has led many to anticipate higher import costs, especially on apparel, electronics, and home goods.

Resellers, who source products locally rather than from overseas suppliers, may now enjoy a competitive advantage.

James Reinhart, CEO of ThredUp, was candid about the upside during a March earnings call.

Anything that increases the cost of new apparel is likely also to provide some modest tailwind to secondhand goods, because we don’t have exposure to bringing in products from overseas.

A ReturnPro survey of over 500 consumers found that 55.4% would be more likely to buy from resale platforms to avoid paying more for tariff-inflated goods.

If borne out in consumer behaviour, that shift could provide significant upside for resale operators.

Thrifting’s cultural rise intersects with economic headwinds

The movement toward resale has been culturally driven, especially by younger shoppers.

According to Piper Sandler’s semiannual “Taking Stock with Teens” survey, 45% of teens bought clothing secondhand this spring.

This shift is reinforced by environmental awareness, social media trends, and economic caution.

In 2024, the US secondhand apparel market grew 14% year over year to $25 billion—five times faster than the broader retail clothing market, according to a widely cited 2025 report by ThredUp.

Projections suggest the market could reach $74 billion by 2029, growing at an average annual rate of 9%.

Still, economic uncertainty could moderate this momentum.

As concerns mount over a slowdown in discretionary spending, some fear demand for even low-cost options could dip.

“It’s bad for everybody, but I would say it’s less bad for resale,” said Jeff Lindquist, partner at Boston Consulting Group.

“Secondhand is simply better positioned to weather softer consumer sentiment.”

Etsy and eBay offer less risky resale exposure

Investors exploring the resale trend have a range of options, but many of the newer, digital-first platforms remain unprofitable and volatile.

For lower-risk exposure, analysts suggest Etsy. While its core business is handmade and vintage goods, the company’s acquisition of secondhand fashion platform Depop in 2021 has paid dividends.

Depop ranked as the fifth favourite teen shopping site this spring and grew gross merchandise sales by over 30% in 2024, even as Etsy’s total GMS declined.

BTIG analyst Marvin Fong believes Etsy’s risk profile remains attractive. “The combination of healthy [free cash flow], low expectations, reasonable valuation, and a strong competitive position offers a relatively favourable risk-reward,” he wrote in a note following Etsy’s February earnings report.

Another established player benefitting from the thrifting trend is eBay.

Though it has fallen off the cultural radar somewhat, eBay remains a key resale platform—especially for electronics, car parts, and collectibles.

Shares are up 7.3% year to date, outperforming the broader S&P 500’s decline.

“We still see eBay shares as one of the relatively safer places to hide in our e-commerce coverage,” wrote Lee Horowitz, an analyst at Deutsche Bank, in an April 14 note.

Brick-and-mortar players like Savers see new growth runway

Thrifting is not just an online phenomenon. Savers Value Village, a traditional thrift-store operator, went public in 2023 and has quietly become a standout.

Unlike many of its digital peers, the company has delivered consistent profits—posting adjusted earnings per share of 58 cents for fiscal 2024.

With a footprint that spans both Canada and the US, Savers is well-positioned for long-term expansion.

William Blair analyst Dylan Carden initiated coverage with an “Outperform” rating, citing competitive advantages and a favorable macro backdrop.

“We believe that weaker peers, growing acceptance of resale, and the fractured nature of the market all support Savers’ longer-term growth vision,” he wrote in an April note.

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Mexico’s Sheinbaum rejects IMF’s pessimistic outlook and defends the country’s growth prospects

On Tuesday, Mexican President Claudia Sheinbaum publicly rejected the International Monetary Fund’s (IMF) recent prediction of a 0.3% contraction in Mexico’s economy in 2025.

During her regular morning press briefing, Sheinbaum stated that the government disagrees with the projection and questions the assumptions underlying it.

“We don’t know what it is based on, We do not agree,” Sheinbaum stated. “We have our economic models, which the finance ministry has, that do not coincide with this projection.”

Her comments came just hours after the IMF released its updated World Economic Outlook, which forecast a 0.3% economic contraction for 2025, down from the fund’s January forecast of a 1.4% expansion.

The updated forecast links the contraction mostly to the impact of newly imposed US tariffs on Mexican exports, a scenario that promises to weigh hard on Latin America’s second-largest economy.

Mexico is bringing down the growth outlook for the entire region

The IMF has cut its 2025 GDP growth forecast for Latin America and the Caribbean, citing Mexico’s weaker outlook as the primary factor behind the regional downgrade.

The organisation attributed Mexico’s reduced prospects to deteriorating external demand, particularly tied to US trade policy shifts, which risk disrupting regional supply chains and amplifying economic headwinds across neighbouring economies.

Much of the IMF’s lowered prediction is based on the chilling effect of US tariffs on Mexican exports, particularly in manufacturing sectors such as automobiles and electronics.

Analysts believe that due to Mexico’s tight interconnectedness with North American supply chains, even minor trade disruptions could have a significant impact on its GDP.

Unlike the pessimistic forecast from the IMF, Mexico’s finance ministry released a draft budget earlier this month forecasting growth of between 1.5% and 2.3% this year.

That estimate, termed “conservative” by officials, is still markedly more optimistic than the outlook by at least the Mexican central bank and most private analysts, who have started flagging stiffening headwinds.

Sheinbaum stands by domestic models

The Sheinbaum administration has consistently portrayed Mexico’s economic fundamentals as healthy, citing robust labour markets, stable inflation, and infrastructure investments linked to nearshoring trends.

The president highlighted that the government’s economic modelling is still the key direction for budgetary and monetary policy.

Despite Sheinbaum’s optimistic stance, the disparity between official estimates and those of multilateral organisations and market experts may prompt additional examination, especially as Mexico prepares for broader fiscal debates.

Peso climbs despite IMF’s grim outlook

According to Trading Economics, the Mexican peso rose to a near six-month high of 19.6 per US dollar, supported by the country’s 11% benchmark interest rate, which continues to draw carry-trade inflows.

This appreciation was further bolstered by a “very productive” call between Presidents Claudia Sheinbaum and Donald Trump, which alleviated concerns about probable additional tariffs on major Mexican exports such as steel, automobiles, and tomatoes.

The peso’s gain also mirrors broader US dollar weakness, as President Trump’s criticism of the Federal Reserve and proposals for immediate rate reduction have cast doubt on the Fed’s independence, reducing the dollar’s safe-haven attractiveness.

Meanwhile, Mexico’s consistent oil export profits continue to boost trade receipts, boosting investor confidence in the country’s economic strength.

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Asian markets open: Stocks surge as Trump eases Fed firing threat, trade hopes build

A wave of relief washed over Asian financial markets on Wednesday, propelling most major stock indices higher as investors reacted positively to indications that US President Donald Trump would not dismiss Federal Reserve Chair Jerome Powell, coupled with optimistic comments regarding the US-China trade dispute.

Easing fears spark market enthusiasm

After days of simmering anxiety, markets found comfort in President Trump’s direct statement to reporters on Tuesday where he declared, “I have no intention of firing him,” referring to Powell.

Trump had previously suggested he might take the unprecedented step of removing the Fed chief following the central bank’s pause on further interest rate cuts, rattling investors concerned about the Fed’s independence.

Adding to the improved sentiment were remarks from US Treasury Secretary Scott Bessent.

In a Tuesday speech, Bessent described the ongoing tariff confrontation with China as unsustainable and stated he anticipates a “de-escalation” in the trade war, offering a glimmer of hope for a resolution to the protracted conflict that has weighed heavily on global growth prospects.

Wall Street’s powerful rebound sets the tone

This shift in tone followed a dramatic turnaround on Wall Street the previous day.

US stocks staged a widespread and powerful rally on Tuesday, decisively reversing sharp losses from the start of the week.

The S&P 500 climbed a robust 2.5%, while the Dow Jones Industrial Average surged 1,016 points, or 2.7%.

The Nasdaq composite also gained a strong 2.7%.

The rally was remarkably broad, with reports indicating that 99% of the stocks within the S&P 500 index advanced, signaling strong conviction returning to the market, at least temporarily.

A suite of better-than-expected profit reports from large US corporations also contributed to the positive momentum.

Asia catches the updraft

This bullish sentiment carried over into Asian trading on Wednesday.

Japan’s benchmark Nikkei 225 led the gains, jumping 1.7% to 34,797.22 in morning trading.

Australia’s S&P/ASX 200 surged 1.6% to 7,943.00, and South Korea’s Kospi added 1.2% to 2,515.19.

In Hong Kong, the Hang Seng index climbed 1.7% to 21,927.92.

Mainland China’s Shanghai Composite was an exception, remaining little changed, down less than 0.1% at 3,298.33.

Volatility expected to persist amid uncertainty

Despite the day’s optimism, market strategists caution against assuming a smooth path forward.

Many anticipate continued market volatility, characterized by sharp swings up and down, as investor sentiment ebbs and flows with developments in trade negotiations.

The prevailing view on Wall Street is that unless President Trump secures agreements with trading partners to lower his administration’s tariffs relatively quickly, the risk of the US economy sliding into recession remains significant.

Underscoring these global economic headwinds, the International Monetary Fund (IMF) on Tuesday further downgraded its forecast for global growth this year to 2.8%, down from a previous estimate of 3.3%.

Corporate sidebar: Tesla troubles continue

In company-specific news that offered a contrast to the broader market rally, Tesla reported a significant drop in quarterly profits after Tuesday’s US market close, falling far short of analyst estimates ($409 million vs $1.39 billion a year earlier).

The electric vehicle maker’s results have been negatively impacted by various issues including vandalism and consumer backlash related to CEO Elon Musk’s controversial oversight of cost-cutting measures for the US government.

Musk announced he plans to spend less time involved in Washington affairs and refocus on running Tesla.

Other market movements

In the bond market, yields on longer-term US Treasuries eased slightly after a recent unsettling climb.

The yield on the benchmark 10-year Treasury note pulled back to 4.39% from 4.42% late Monday.

Oil prices saw gains, with benchmark US crude adding $1.23 to $64.31 a barrel, and Brent crude rising 44 cents to $67.88.

In currency markets, the US dollar weakened against the Japanese yen, trading at 141.85 yen compared to 142.37 yen previously.

The euro strengthened slightly against the dollar, buying $1.1397, up from $1.1379.

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Indian markets open: Sensex reclaims 80K, Nifty nears 24.3K as tech rally powers 7th day gains

Indian equity benchmarks extended their winning streak into a seventh consecutive session today, propelled higher by a vigorous rally in technology stocks and positive cues flowing from a strong overnight performance in US markets.

The Sensex reclaimed the psychological 80,000 mark for the first time in over three months, while the Nifty 50 climbed towards the 24,300 level.

Sensex reclaims milestone, Nifty advances steadily

Opening on a positive note, the markets sustained momentum throughout the session.

The S&P BSE Sensex ultimately closed significantly higher, although specific closing figures varied slightly from the initial text.

The key achievement was breaching the 80,000 level, a feat last accomplished on January 3, 2025, marking 73 trading days or 110 calendar days since.

The Nifty 50 also saw smart gains, trading near the 24,300 mark during the session before settling slightly lower but still firmly in positive territory.

Tech sector takes center stage

The standout performer today was undoubtedly the information technology sector.

The Nifty IT index soared an impressive 3.2% to 35,025.65, significantly outperforming other sectoral gauges. Leading the charge was HCL Technologies, whose shares jumped a remarkable 7.4% to an intra-day high of Rs 1,588.

This surge followed the IT giant’s robust Q4 earnings report and positive guidance, which brokerage houses viewed bullishly, particularly noting the company’s perceived limited exposure to potential US tariff impacts.

HCLTech’s CEO further bolstered sentiment by stating the company had seen no tariff impact so far.

The positive momentum lifted the entire Nifty IT pack, with all constituents reportedly trading higher, a stark contrast to recent sluggishness in the sector.

Drivers behind the market ascent

Several factors converged to fuel today’s rally:

  • US market rebound: A powerful overnight rally on Wall Street provided a significant tailwind. US indices snapped a four-day losing streak, closing sharply higher (Dow +2.66%, S&P 500 +2.51%, Nasdaq +2.71%). This US upswing was partly attributed to comments from US Treasury Secretary Scott Bessent.
  • Trade de-escalation hopes: Speaking to investors privately, Bessent reportedly expressed expectations for a “de-escalation” in the US-China trade war in the “very near future,” calling the high-tariff standoff unsustainable. This eased investor anxieties globally.
  • Musk refocusing on Tesla: Relief among Tesla investors after CEO Elon Musk indicated he would scale back his government-related work and dedicate more time to the electric vehicle company also contributed to the positive US backdrop, addressing concerns about his political activities potentially harming the brand.
  • Commodity context: While domestic gold prices saw activity linked to festivals and wedding season, pushing 24-carat rates to reported highs near Rs 1,01,600/10 grams, the global outlook presented a different picture.

Gainers led by tech, financials lag slightly

Reflecting the tech dominance, today’s top gainers on the main indices included HCLTech (surging around 7.14%), followed by Tech Mahindra (+4.20%), Infosys (+3.34%), and TCS (+2.14%).

Automaker M&M also joined the rally with a gain of 2.37%.

On the losing side, some profit-taking or consolidation was seen in select financials and telecom, with Bharti Airtel (-0.32%), HDFC Bank (-0.44%), Kotak Bank (-0.45%), Bajaj Finance (-0.46%), and Eternal [-0.48%] seeing minor dips.

Despite some slight pullback in select heavyweights, the overall market breadth remained positive, indicating continued underlying strength as the winning streak extended to seven sessions.

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Europe markets open: Gains expected after Trump walks back Powell dismissal, trade hopes rise

European stock markets are poised for a positive start on Wednesday, signaling a rebound in investor confidence as anxieties surrounding US-China trade relations and the independence of the US Federal Reserve appear to ease.

The improved sentiment follows reassuring comments from President Donald Trump and a strong rally on Wall Street.

Early indicators suggest a firm opening across the continent.

According to data from IG, the UK’s FTSE 100 is anticipated to open 86 points higher at 8,418, Germany’s DAX is projected to gain 457 points to 21,739, France’s CAC 40 is expected to rise 84 points to 7,402, and Italy’s FTSE MIB is seen opening 446 points higher at 35,906.

This optimistic outlook stems largely from developments in the US on Tuesday.

Global markets, including a sharp rally in US stocks, reacted positively after President Trump stated he has “no intention” of firing Federal Reserve Chair Jerome Powell before his term concludes next year.

Trump’s previous criticisms and hints at potentially removing Powell had stoked fears about the central bank’s autonomy, a key pillar of market stability.

Furthermore, investor nerves regarding the US-China trade conflict were somewhat calmed.

While details remain sparse, President Trump indicated that final tariffs on Chinese exports “won’t be anywhere near as high as 145%,” although he cautioned that the duties “won’t be 0%.”

These hints, combined with earlier comments from Treasury Secretary Scott Bessent suggesting an eventual “de-escalation,” fueled hopes for a potential breakthrough in the standoff.

US stock futures extended gains overnight following these developments, providing a positive lead for Asian and European sessions.

While global macro concerns ease slightly, investors in Europe turn their attention to regional factors.

Key data releases today include the latest purchasing managers’ index (PMI) readings, which offer insights into the health of the Eurozone’s vital services and manufacturing sectors.

Corporate earnings will also be scrutinized, with reports due from UK banking giant NatWest and Heathrow Airport.

Corporate contrasts: SAP shines, Volvo stalls

Early corporate news presented a mixed picture. German software behemoth SAP announced impressive first-quarter results Wednesday morning.

Operating profit surged 60% year-on-year to 2.3 billion euros ($2.6 billion), a significant turnaround from the 787 million euro loss recorded in the same period of 2024.

Revenue climbed 12% to 9 billion euros, driven by strong cloud performance (backlog up 28%).

Earnings per share jumped 79% to 1.44 euros.

According to CNBC, SAP CEO Christian Klein stated the results showed “our success formula is working,” adding:

SAP’s business model remains resilient in uncertain times… Our AI-powered portfolio enables companies to navigate supply chain disruptions… and to unlock efficiencies with agility and speed.

SAP recently overtook Novo Nordisk to become Europe’s most valuable listed company.

In contrast, Swedish truck maker Volvo reported a 7% year-on-year decline in net sales for the first quarter of 2025, explicitly citing the impact of President Trump’s tariff regime.

Vehicle sales were down 9% annually, although the service business grew modestly. “As the quarter went by, there was increased uncertainty surrounding tariffs and their effect on global trade,” commented Martin Lundstedt, President and CEO of Volvo.

The company’s operating income fell to SEK 13.3 billion ($1.39 billion) with a margin of 10.9%, down from SEK 18.2 billion and a 13.8% margin a year prior, illustrating the tangible impact of trade friction on manufacturers.

Gold eases from highs

Reflecting the shift towards slightly improved risk appetite, spot gold prices retreated on Wednesday after briefly surpassing the $3,500 per ounce mark earlier in the week.

The precious metal, which benefits from uncertainty, eased following President Trump’s more conciliatory comments on trade and the Fed. By 8:50 a.m. Singapore time, gold had slid 0.55% to trade at $3,362.85 per ounce.

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Pahalgam terror attack: J&K Bank shares fall; analysts warn of short-term volatility if India retaliates

Jammu and Kashmir Bank shares declined sharply on Wednesday, falling nearly 9% in early trade after a terror attack in the popular tourist destination of Pahalgam in the north Indian region of Jammu & Kashmir left at least 26 civilians dead.

The incident, which occurred on Tuesday afternoon at Baisaran, a scenic meadow often called “mini Switzerland,” has raised fears of heightened instability in the region and triggered a negative reaction from investors.

The stock dropped as much as 8.6% on the BSE, hitting an intraday low of ₹103.41 per share.

On the National Stock Exchange (NSE) and BSE combined, nearly 16.1 million shares were traded by 10:30 AM, significantly above the two-week average volume.

On the BSE alone, around 0.70 million shares changed hands, well above the recent average of 0.52 million shares.

At 1:10 pm IST, the stock was down by 8.05%.

According to Deepak Jasani, a stock market veteran quoted in Business Standard, the stock experienced a knee-jerk reaction on the downside.

“The evolving situation in the region will drive sentiment in the stock over the coming days. The stock may recover with some gap if the situation does not deteriorate further,” he said.

One of the deadliest attacks on civilians; TRF takes responsibility

The attack occurred around 3 PM on Tuesday in Baisaran, located about six kilometres from Pahalgam in Jammu and Kashmir.

The meadow is a well-known tourist attraction, drawing visitors from across India and abroad during spring and summer months.

The Resistance Front (TRF), a proxy of the banned Pakistan-based Lashkar-e-Taiba group, claimed responsibility for the attack.

In a public statement, Jammu and Kashmir Chief Minister Omar Abdullah said the assault was “much larger than anything we’ve seen directed at civilians in recent years,” hinting at the potential implications for both local security and regional geopolitics.

The incident has drawn international condemnation. US President Donald Trump, Russian President Vladimir Putin, and British Prime Minister Keir Starmer all issued statements denouncing the attack and expressing solidarity with India.

Retaliation by India could lead to short-term market volatility: analysts

Despite the tragic incident, broader Indian markets continued their upward momentum, with benchmark indices extending their rally for a seventh consecutive session on Wednesday.

Analysts believe this reflects investor confidence in the resilience of the Indian economy, although geopolitical concerns remain in focus.

Vinit Bolinjkar, Head of Research at Ventura Securities, said any retaliation by India could lead to short-term market volatility.

“Unless India undertakes strong military action against Pakistan, any market reaction may be limited. We’ve already seen the markets absorb extreme events like the Russia-Ukraine war and the US-China tariff standoff under President Trump,” he said.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, echoed this view.

He stated that investors would be closely watching the government’s next steps, whether through diplomatic measures, targeted operations, or a wider military response.

“Today’s macroeconomic backdrop is very different from what it was during the 1999 Kargil War. India’s GDP has grown more than tenfold in just over two decades,” Bathini added, suggesting that the country is now better positioned to absorb such geopolitical shocks.

Veteran analyst Ajay Bagga noted on X (formerly Twitter) that while markets may stay cautious in the near term, any declines in the wake of potential Indian retaliation would likely be short-lived, as seen in past instances.

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Mexico’s Sheinbaum rejects IMF’s pessimistic outlook and defends the country’s growth prospects

On Tuesday, Mexican President Claudia Sheinbaum publicly rejected the International Monetary Fund’s (IMF) recent prediction of a 0.3% contraction in Mexico’s economy in 2025.

During her regular morning press briefing, Sheinbaum stated that the government disagrees with the projection and questions the assumptions underlying it.

“We don’t know what it is based on, We do not agree,” Sheinbaum stated. “We have our economic models, which the finance ministry has, that do not coincide with this projection.”

Her comments came just hours after the IMF released its updated World Economic Outlook, which forecast a 0.3% economic contraction for 2025, down from the fund’s January forecast of a 1.4% expansion.

The updated forecast links the contraction mostly to the impact of newly imposed US tariffs on Mexican exports, a scenario that promises to weigh hard on Latin America’s second-largest economy.

Mexico is bringing down the growth outlook for the entire region

The IMF has cut its 2025 GDP growth forecast for Latin America and the Caribbean, citing Mexico’s weaker outlook as the primary factor behind the regional downgrade.

The organisation attributed Mexico’s reduced prospects to deteriorating external demand, particularly tied to US trade policy shifts, which risk disrupting regional supply chains and amplifying economic headwinds across neighbouring economies.

Much of the IMF’s lowered prediction is based on the chilling effect of US tariffs on Mexican exports, particularly in manufacturing sectors such as automobiles and electronics.

Analysts believe that due to Mexico’s tight interconnectedness with North American supply chains, even minor trade disruptions could have a significant impact on its GDP.

Unlike the pessimistic forecast from the IMF, Mexico’s finance ministry released a draft budget earlier this month forecasting growth of between 1.5% and 2.3% this year.

That estimate, termed “conservative” by officials, is still markedly more optimistic than the outlook by at least the Mexican central bank and most private analysts, who have started flagging stiffening headwinds.

Sheinbaum stands by domestic models

The Sheinbaum administration has consistently portrayed Mexico’s economic fundamentals as healthy, citing robust labour markets, stable inflation, and infrastructure investments linked to nearshoring trends.

The president highlighted that the government’s economic modelling is still the key direction for budgetary and monetary policy.

Despite Sheinbaum’s optimistic stance, the disparity between official estimates and those of multilateral organisations and market experts may prompt additional examination, especially as Mexico prepares for broader fiscal debates.

Peso climbs despite IMF’s grim outlook

According to Trading Economics, the Mexican peso rose to a near six-month high of 19.6 per US dollar, supported by the country’s 11% benchmark interest rate, which continues to draw carry-trade inflows.

This appreciation was further bolstered by a “very productive” call between Presidents Claudia Sheinbaum and Donald Trump, which alleviated concerns about probable additional tariffs on major Mexican exports such as steel, automobiles, and tomatoes.

The peso’s gain also mirrors broader US dollar weakness, as President Trump’s criticism of the Federal Reserve and proposals for immediate rate reduction have cast doubt on the Fed’s independence, reducing the dollar’s safe-haven attractiveness.

Meanwhile, Mexico’s consistent oil export profits continue to boost trade receipts, boosting investor confidence in the country’s economic strength.

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IMF slashes 2025 growth forecast for Latin America on Mexico weakness

The International Monetary Fund sharply cut its growth outlook for Latin America and the Caribbean in 2025, with a steep contraction in Mexico’s growth accounting for nearly the entire region’s slowdown.

In its latest World Economic Outlook released on Tuesday, the fund slashed its regional GDP growth forecast to 2.0% next year, compared with 2.4% in 2024 and a 2.5% forecast made in January.

In its updated report, the IMF said the revisions are mainly due to a “large downgrade to Mexico.”

The organisation cited “weaker-than-expected activity in late 2024 and early 2025, the impact of US-imposed tariffs, related uncertainty, geopolitical tensions, and a tighter financing environment” as reasons for the downgrade.

Mexico in the red

Mexico, the region’s second-largest economy and a major trading partner of the United States, is expected to decrease by 0.3% in 2025.

This indicates a significant departure from the IMF’s previous forecast of a 1.4% expansion.

The country’s tight economic ties with the United States have made it vulnerable to trade policy changes north of the border.

The recent increase in US tariffs, which are already at their highest level in a century, has had a significant impact on Mexican exports.

The contraction is anticipated to cause rippling effects throughout the region. According to analysts, the blow to Mexico’s economy could disrupt supply chains, limit investment flows, and increase uncertainty in neighbouring nations, particularly those with strong economic and migration ties to Mexico.

Mixed outlook across the region

Although Mexico is dragging down the overall forecast, some of its neighbours are set to perform better.

Brazil, Latin America’s biggest economy, is now expected to grow 2.0% in 2025, slightly down from January’s 2.2% forecast, but still with good growth prospects.

Despite ongoing growth, the economy is dealing with challenges like elevated interest rates and subdued investment, which could hinder its momentum.

Argentina, on the other hand, stands out as a rare bright spot. The IMF upgraded its growth forecast to 5.5% from 5.0%, as the country begins to stabilise following years of economic turbulence.

However, the sustainability of this growth remains uncertain, given ongoing fiscal constraints and inflationary pressures.

Elsewhere in the region, Colombia is forecast to grow 2.4%, Chile 2.0%, and Peru 2.8% — all modest figures that reflect a generally cautious outlook amid tight global financial conditions and political uncertainty in several countries.

Central America and the Caribbean: slow but steady

In 2025, Central America is projected to register a growth of 3.8%, down from 3.9% in 2024.

Strong remittance flows, the recovery of tourism, and economic ties with the US are supporting the subregion, but it is affected by the general slowdown.

At the same time, growth in the Caribbean is expected to slow to 4.2% in 2025 from a strong 12.1% expansion in 2024.

The IMF attributed last year’s surge to a post-pandemic tourism rebound, which it noted is now returning to more typical levels.

Global headwinds weigh on the outlook

Latin America’s weaker prognosis is part of a larger global downturn. The IMF also reduced its 2025 global growth forecast to 2.8% from 3.3% in the January report.

That downgrading, however, is largely due to growing US tariffs and tightening financial conditions, which have dampened global commerce and investment.

“The global environment remains challenging,” the IMF cautioned. “Rising protectionism, lingering inflation risks, and geopolitical tensions are clouding the outlook for both advanced and emerging economies.”

As Latin America prepares for a slower 2025, policymakers may confront difficult choices: between maintaining inflation and increasing growth, or between protecting their economies from external shocks and implementing necessary changes.

Mexico, in particular, may face a difficult year navigating a tumultuous and increasingly unpredictable global scene.

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