Mumbai: Indian equities will likely remain under pressure on Friday, tracking weakness in global peers amid an escalation in the US-China trade war.

Stock markets in Asia took a beating on Friday as investors scrambled for safe-haven assets after US President Donald Trump said he would slap a 10% tariff on the remaining $300 billion worth of Chinese imports from next month.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.51% to its lowest level since mid-June, while Japan's Nikkei tumbled 1.91%.

Trump's comments break a truce in the trade war struck in June and could further disrupt global supply chains.

China's state media quickly denounced the move, with the editor in chief of the Global Times saying on Friday that a trade deal between the US and China was now "further away."

Back home, auto stocks will be in focus as India’s automobile industry sank deeper into an abyss in July with sales at some of the top passenger vehicle makers plunging to their worst in about two decades.

Meanwhile, India’s largest lender State Bank of India (SBI) is expected to post a net profit of 4,106 crore in the three months to June, as against a loss of 4,875 crore in the same period last year, showed a Bloomberg consensus estimate of 16 analysts.

In the June quarter of FY19, the bank had reported a net loss a loss for the third consecutive quarter after setting aside funds to cover losses on its bond portfolio and increased gratuity.

Other major companies which will announce June quarter results on Friday are ITC, HDFC, Power Grid Corporation of India, GATI, BSE Limited, Andhra Bank and Union Bank of India.

In global markets, the proposed levies by the US on China triggered a stampede for safe-haven assets, including US bonds, the yen and gold, while the yuan and the Australian dollar hit multi-month lows.

Gold held firm at $1,438.9 per ounce, down 0.4% in Asia, after having risen 2.4% on Thursday, staying near a six-year high of $1,453 touched two weeks ago.

The yen edged up to 107.25 on the dollar after rising 1.3% overnight, its biggest daily gain in more than two years. The euro also recovered to $1.1090, from a two-year low of $1.1027 hit in US trade.

In contrast, the risk sensitive Australian dollar slumped to a seven-month low of $0.6795, while the offshore yuan hit a nine-month low of 6.9731 to the dollar.

The 10-year US bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since November 8, 2016, when Trump won a surprise victory in the presidential election.

Trump's decision has thrown the Federal Reserve another curve ball that may force it to again cut interest rates to protect the US economy from trade-policy risks after its first rate cut in more than a decade on Wednesday.

Although Fed Chairman Jerome Powell said the rate cut was a "mid-cycle adjustment" and not a start to a full-blown rate-cutting cycle, markets aren't fully convinced. The October Fed funds rate futures have jumped to now fully price in a rate cut in September, compared with only around 60% before the tariff announcement. Another 25 basis point move is priced in by December.

The new tariffs would hit a wide swathe of consumer goods from cell phones and laptop computers to toys and footwear, at a time when the manufacturing sector is already reeling from the accumulative impact of the trade war.

Oil prices bounced back a tad after suffering sharp falls the previous day. Brent crude rose 1.2% to $61.24 per barrel, after having fallen 7.0% on Thursday - its biggest daily percentage drop since February 2016. US West Texas Intermediate (WTI) crude rose 1.1% to $54.52, having shed 7.9% on Thursday.

(Reuters contributed to the story)

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