The Morning Edge: Financial Markets Brace For Geopolitical Shifts As Trump-Putin Talks Loom

US President Donald Trump announced he will speak with Russia’s Vladimir Putin on Tuesday morning to discuss ending the Ukraine war, with territorial concessions and control of the Zaporizhzhia nuclear power plant expected to dominate the talks. “What’s happening in Ukraine is not good, but we’re going to see if we can work a peace agreement, a ceasefire, and peace—and I think we’ll be able to do it,” Trump told reporters on Monday. The conversation follows Ukraine’s acceptance of a 30-day ceasefire proposal last week, even as heavy aerial strikes and escalating tensions near the Kursk region underscore the fragility of the situation.

The Kremlin has expressed “cautious optimism” about the ceasefire plan, which was relayed to Trump via US envoy Steve Witkoff during recent talks in Moscow. White House press secretary Karoline Leavitt confirmed that the Zaporizhzhia plant, located near the Russia-Ukraine border, will be a key topic of discussion. As markets await the outcome of these high-stakes talks, investors are weighing the potential for a geopolitical shift that could ease energy supply concerns—or further destabilise an already volatile global landscape. Stay tuned for updates as this critical dialogue unfolds.

Data
US retail sales showed a modest rebound in February, rising 0.2% after a downwardly revised 1.2% drop in January—the largest decline since November 2022—according to the Commerce Department’s Census Bureau. The data pointed to cautious consumer behaviour, with sales at restaurants and bars falling the most in 13 months. While the report suggested the economy continued to grow in the first quarter, the pace remained moderate, highlighting concerns about weakening demand.

Meanwhile, factory activity in New York State plummeted in March, with the Federal Reserve Bank of New York’s Empire State manufacturing index plunging 26 points to -20.0, its sharpest drop since May 2023. New orders fell sharply, and input prices rose at the fastest rate in over two years, signalling potential economic softening. Together, the retail sales and manufacturing data paint a picture of an economy facing mounting headwinds, with consumers and businesses alike grappling with uncertainty and rising costs.

Markets
Overnight
US stocks indices climbed on Monday as investors hunted for bargains following a four-week slide in the Nasdaq and S&P 500, while assessing the latest economic data to gauge the impact of the Trump administration’s policies. Retail sales edged up in February but missed expectations, reflecting tariff uncertainty and federal job cuts, while US homebuilder sentiment fell to a seven-month low in March due to rising construction costs from import tariffs. Tesla dropped 4.79% after Mizuho slashed its price target to $430 from $515, extending its year-to-date decline to 41%. Meanwhile, quantum computing stocks surged, with D-Wave Quantum and Quantum Corp jumping 10.15% and 40.09%, respectively, as Nvidia’s annual conference kicked off. Intel soared 6.82% on reports that incoming CEO Lip-Bu Tan is considering major changes to its chip manufacturing and AI strategies.

US Treasury yields curve flattened on Monday as mixed retail sales data and concerns about a softening economy weighed on longer-dated yields, while shorter-dated yields rose on expectations that the Federal Reserve will maintain its restrictive policy stance. The yield on benchmark 10-year notes fell 1 basis point to 4.299%, down from 4.308% on Friday, while the 30-year bond yield dropped 2.3 basis points to 4.5919%. In contrast, the 2-year note yield, which reflects Fed rate expectations, climbed 3.3 basis points to 4.048%, highlighting the market’s uncertainty over the economic outlook and monetary policy path.

The US dollar hovered near a five-month low against the euro on Monday, as investor caution over President Donald Trump’s trade policies pressured the currency. The dollar index slipped 0.33% to 103.39, while the euro gained 0.38% to $1.092. Against the Japanese yen, however, the dollar strengthened 0.29% to 149.05. With trade uncertainties shaping market sentiment, the greenback remains under pressure despite pockets of strength.

Brent crude oil prices gained on Monday, driven by supply concerns after the US vowed to continue strikes against Iran-aligned Houthi forces in Yemen. Brent crude settled at $71.07 per barrel, up 0.69%, as fears of escalating tensions in the oil-rich Middle East supported prices. On the demand side, encouraging economic data from China added further support, reinforcing expectations of steady consumption. With geopolitical risks and global demand dynamics in focus, oil markets remain on edge.

Day’s Ledger

Economic Data:
- Eurozone March ZEW Economic Sentiment Index
- Eurozone January Trade data
- US February Housing Starts Data
- US February Industrial Production Data

Corporate Actions:
- APT Packaging, to consider raising funds by way of issuance of equity shares on preferential basis
- Captain Technocast, to consider bonus shares issue
- CG Power and Industrial Solutions board to consider dividend
- Ugro Capital board to discuss fundraising plans
- TARC board to discuss fundraising plans

Policy
- Bank of Japan two-day policy meeting starts 
- US FOMC two-day policy meeting starts
- RBI to buy gilts worth ₹500 billion via OMO auction
- European Commission President von der Leyen meets WTO Director General Okonjo-Iweala 

Tickers

• ADITYA BIRLA REAL ESTATE's subsidiary, Birla Estates, launched its first project in Pune with an estimated revenue potential value of ₹27 billion.
• COFFEE DAY ENTERPRISES has negotiated with IDBI Trusteeship Services and agreed to settle the outstanding debt of the two debenture holders for ₹2.05 billion, payable in three tranches.
• HINDUSTAN UNILEVER gets CCI nod to acquire Minimalist in ₹26.70 billion deal
  Indian Renewable Energy Development Agency increases borrowing limit for 2024-25 to ₹292 Billion from ₹242 billion
• IRCON INTERNATIONAL has received an EPC contract worth ₹10.96 billion for new Meghalaya secretariat complex
• JM FINANCIAL board approves transfer of private wealth business to subsidiary through slump sale
• Moody’s Ratings has placed INDUSIND BANK's Baseline Credit Assessment on review for downgrade.
• MOREPEN LABORATORIES has launched Empamore for Type 2 Diabetes Mellitus (T2DM), heart failure with reduced ejection fraction (HFrEF), and chronic kidney disease (CKD).
• NBCC (INDIA)  has received a work order worth ₹446 million from the Mahatma Gandhi Institute for Rural Industrialisation.
• RELIGARE ENTERPRISES’ board has commissioned a governance review of Religare Enterprises and its subsidiaries, Religare Finvest and Religare Housing Development Finance Corporation.
• SHILPA MEDICARE’s subsidiart partners with mAbTree Biologics for novel cancer therapy.
• SURYODAY SMALL FINANCE BANK’s Promoter and Managing Director & CEO, Baskar Babu Ramachandran has purchased 1.5 lakh equity shares from the open market.

Must Read

• German insurance giant Allianz to sell stake in Bajaj JVs for ₹246 billion
• Govt weighing challenges, opportunities emerging from US tariffs: Commerce Secretary
• OECD warns of tariff drag on growth as Trump vows to press on with levies
• Services, auto, steel and chemical cos most exposed to US tariffs: Moody's
• Net direct tax collections rise 13% to ₹21.3 trillion till March 16 of FY25
• US tariffs could thrust Germany into recession, central bank governor says
• India to Sell Loss-Making Airports in Bundles to Lure Investors
• India’s Options Trading Curbs Drive Speculators Out of Market
• SBI shelves $1.7 billion fund raising as yields elevated, sources say
• Religare Enterprises seeks governance review, funding from Burman family

Daily Mantra
I think people who are creative are the luckiest people on earth. I know that there are no shortcuts, but you must keep your faith in something Greater than You, and keep doing what you love. Do what you love, and you will find the way to get it out to the world.  - Judy Collins