Opening Bell - Morning Commentary

Emerging Markets currency Index rises to an all-time high - Expect more demand for emerging markets assets.

U.S. equity markets closed modestly lower on Monday, with the S&P 500 snapping a streak of nine consecutive days with positive returns.

The energy sector was a laggard, declining by 2%, driven by a fall in oil prices following an announcement that OPEC+ will bring additional oil supply to the market beginning in June.

On the economic front, the ISM Services PMI was higher than expected for April at 51.6, highlighting resilience in the U.S. economy's services sector despite the uncertain trade-policy backdrop.

Investors will focus on central-bank policy this week. The FOMC meeting for May concludes on Wednesday, and expectations are that the Fed will hold its policy rate steady at 4.25%—4.5%.

Treasury Secretary Scott Bessent expressed optimism over progress in U.S.-China trade talks, though he acknowledged the current 145% tariff levels were unsustainable. He emphasised that the U.S., being the deficit country, held more leverage.

The MSCI EM FX Index is a benchmark that measures the performance of emerging market currencies against the US dollar. It rose to a record high as the Taiwan dollar and other peers were bolstered by the American dollar's weakness amid fresh signs of a potential de-escalation of the trade war. Strong demand for EM currencies eventually translates into stronger demand for EM stocks or bonds.

Japan’s Sumitomo Mitsui Banking Corporation (SMBC) is set to acquire a 51% stake in Yes Bank. This marks a significant shift in ownership for India’s sixth-largest private lender.

India will conduct a civil defence mock drill on 7 May 2025 across 244 districts in a major national preparedness move. Prompted by the recent Pahalgam terror attack that claimed 26 lives, the drill will involve local authorities, students, and volunteers and assess readiness for air raid warnings, blackout protocols, and civilian evacuation procedures.

The Nifty rose to fresh 2025 highs on Monday on strong global cues. The Indian Rupee witnessed a significant surge, reaching its highest level in six months.

Technically, the Nifty remains firmly in an uptrend, trading above its key moving averages. On the higher side, 24590 is likely to act as an immediate resistance, while the

24,200 level could provide immediate support on the downside.