The threat from heightened tensions between the U.S. and China could drag down stocks more than many are anticipating, according to one hedge fund vet.

In an interview with CNBC’s “Halftime Report” on Thursday, Appaloosa Management co-founder David Tepper warned that equities are at risk of falling 5% to 20% if the trade war with the Asian economic powerhouse worsens.

Macroeconomic data announced during the week as well the news of the Prime Minister’s impending meeting on Saturday have been positive for the markets.

MUMBAI: Equity markets on Friday continued the momentum from the last trading session on Wednesday, to close higher. BSE Sensex closed the day by almost a percentage higher at 38,090.64 and the Nifty surged 1.28 per cent to 11,515.20. However, BSE Sensex closed 0.8 per cent down for the week and Nifty by 0.6 per cent as currency fears and oil price worries dragged the equities down. Macroeconomic data announced during the week as well the news of the Prime Minister’s impending meeting on Saturday have been positive for the markets.

London — Shares rose around the world on Friday as expectations grew that the US and China will open new trade talks, while an interest rate hike in Turkey supported the lira and global risk appetite.

The MSCI All-Country World index, which tracks shares in 47 countries, was up 0.5% on the day after the start of trade in Europe.

Last week was another important week on Wall Street. The market rallied nicely after the bulls showed up and defended important support (50 DMA line). Remember, after a big rally, it is perfectly normal and healthy to see the market pause and digest that move. Right now, that is exactly what is happening. The market is back in “rally mode” as the major indices are climbing once again. Barring some unforeseen selloff, the major indices are likely to hit new highs in the near future.