Opening Bell - Morning Commentary

U.S. Markets Retreat as Investors Reassess Recent Optimism

U.S. equity markets closed modestly lower Tuesday during a session marked by minimal economic data releases. The pullback follows a robust rebound over the past month, prompting investors to question the sustainability of recent optimism fuelled by apparent easing in trade tensions and inflation concerns.

Technology stocks have been the primary drivers of recent market gains and have experienced broad declines. Industry leaders Nvidia, Apple, and Microsoft all closed in negative territory. The sector dropped 0.5% as investors locked in profits following the extended rally and sentiment shifted amid renewed macroeconomic uncertainties.

Notable movements within the S&P 500 included a sharp decline in FICO shares following heightened regulatory scrutiny, while Moderna surged on favourable vaccine guidance. Defensive sectors, including healthcare and consumer staples, outperformed the broader market, reflecting investors' increasing preference for safer assets amid growing economic uncertainty.

Over recent weeks, easing trade tensions and persistently robust economic data have fuelled a remarkable 20% rally in the S&P 500 since its April 8 low. U.S. small- and mid-cap equities have exhibited powerful momentum during this period, with the Russell Mid-cap Index advancing 21% since April 8, while the Russell 2000 Index, which tracks smaller companies, has gained 19.5% from its recent bottom. This balanced performance across market segments suggests a broad-based economic recovery rather than one concentrated in a few large companies.

Despite the temporary suspension of specific U.S.-China tariffs, investors continue to doubt the longevity of trade relief measures. Additional concerns centre around President Trump's proposed tax cuts, which critics suggest could significantly increase the federal deficit. Market apprehension intensified as major retailers like Walmart cautioned about potential price increases, further stoking inflation worries.

Oil prices jumped more than 1% on Wednesday following reports that Israel is preparing to strike Iranian nuclear facilities, heightening concerns that conflict could disrupt supply chains in the critical Middle East production region.

Asia-Pacific equities advanced today despite Wall Street ending its six-day winning streak. Stock benchmarks in Japan, South Korea, and Australia gained ground, pushing a broader index of regional shares up 0.4% in early trading.

Indian equity benchmarks declined sharply yesterday amid reports of increasing COVID-19 cases in Southeast Asian countries like Singapore and Hong Kong. The Nifty fell for the third consecutive session, shedding 261 points (1.05%) to close at 24,683, while the BSE Sensex dropped 873 points (1.06%) to 81,186.

Japanese bond sell-off has elevated borrowing costs, contributing to global market uncertainty and dampening risk appetite.

Technically, Nifty closed below its 5-day EMA for the first time since May 8, 2025, suggesting a shift to profit-booking. Support levels lie at 24,494 and 24,378, while resistance is expected in the 24,800-24,900 range.

In the absence of strong global cues, Indian markets are likely to pick up from where they left off yesterday.

Opening Bell - Morning Commentary

Japan's PM Raises Alarm on Economic Challenges, Late U.S. Market Recovery to Boost Our Markets' Opening.

US stocks recovered from steep early-session losses and closed slightly higher on Monday. Investors digested news that a major ratings agency had downgraded its U.S. federal government debt assessment. The major averages climbed well off their session lows before ending the day modestly higher. The 10-year Treasury shot up to 4.56% early Monday, its highest intraday level in over a month. However, it was at 4.45% in late trading, little changed from its close on Friday.

On the U.S. economic front, the Conference Board released a report showing that its reading on leading U.S. economic indicators slumped more than expected in April. The report said the leading economic index tumbled by 1.0 per cent in April after sliding by a downwardly revised 0.8 per cent in March. Economists had expected the leading economic index to decrease by 0.8 per cent compared to the 0.7 per cent drop originally reported for the previous month.

U.S. Federal Reserve officials took on cautiously the ramifications of the latest downgrade of the U.S. government’s credit rating and unsettled market conditions as they continued to navigate a very uncertain economic environment.

Japanese Prime Minister Shigeru Ishiba has firmly rejected the idea of tax cuts funded through additional debt issuance, warning that Japan’s fiscal health is in a worse state than Greece's. Speaking in Parliament, Ishiba noted that the country is witnessing a shift toward positive interest rates, citing recent moves by the central bank to unwind its decades-long stimulus policy. Japan’s 10-year government bond yield climbed to a six-week high of 1.48%, while the 30-year yield eased to 2.87%.

China’s industrial production in April grew 6.1% YoY, surpassing expectations of 5.7%, though slightly down from the 7.7% rise recorded in March. However, retail sales disappointed, rising only 5.1% YoY compared to a forecast of 6.0% and slower than March’s 5.9% growth.

Nifty fell for the second day in a row on Monday amid weak global cues. The Indian Rupee exhibited strength, appreciating by 10 paise against the greenback to settle at 85.40. This upward movement in the rupee can be attributed to cooling crude oil prices and a softening of the US dollar.

Nifty is placed above all key moving averages, indicating the continuation of an uptrend. Immediate support for the Nifty is seen in the band of 24750-24800, while positional support stands at 24500. On the upside, resistance is placed at 25116 and 25207.

U.S. futures had suggested a soft opening for American markets when our markets closed yesterday. However, U.S. markets ultimately recovered all their early losses by the closing bell, and hence our markets are expected to open with 0.5% gains today.

Opening Bell - Morning Commentary

US Credit Rating Downgrade to Temper Global Market Sentiment, Local Small and Midcap Stocks are likely to Remain Resilient.

Moody’s Investors Service cut the United States' credit rating, citing concerns over rising debt and political deadlock. This is a jolt to US markets, though it may not impact it immediately, as Moody’s is the last of the three major credit agencies to maintain a top-tier rating for the US.

In the long run, the US establishment must take corrective measures, as a failed or significantly undersubscribed Treasury auction would represent a severe shock to global financial markets. Such an event could precipitate a crisis of confidence in US government debt, potentially leading to sharp increases in borrowing costs across the economy and rapid asset repricing in equity and corporate debt markets.

Last week, Indian equity markets experienced a significant rally, easing geopolitical tensions and upbeat global cues. The U.S. stock market experienced a strong rebound, recovering much of the ground lost during the April tariff-induced selloff. Most U.S. stocks’ weekly gains came following trade negotiations between the world’s two largest economies. U.S. and Chinese negotiators agreed to sharply reduce rates for many recently introduced tariffs for 90 days while pursuing further talks that could result in a longer-term agreement.

Continuous institutional buying in cash markets, FPIs' net short positions in the index markets, and positive surprises on Q4FY25 earnings season in select stocks make us believe that broad-based growth may give way to more sector and stock-specific performance in the coming periods.

The Nifty registered a rally of more than 4% last week, backed by strong broader markets. The Nifty Midcap100, Smallcap100, and Microcap250 indices outperformed the Nifty by soaring 7.21%, 9.17%, and 9.99%, respectively. The next resistance for the Nifty is seen in the band of 25200-25300, where 76.4% and 78.6% retracement levels are placed, respectively. Previous resistance of 24545, derived by 61.8% retracement, is expected to interchange its role as a support going forward for Nifty.

Indian markets are poised to open cautiously in response to sobering signals from US market futures following the sovereign ratings downgrade, though local small and midcap stocks are expected to maintain their resilience.

Opening Bell - Morning Commentary

Trade war truce between USA & China lifts sentiments across the globe, lower inflation print will propel the RBI to cut rates in the forthcoming policy

The S&P 500 and the Nasdaq closed higher on Tuesday for a second straight day after softer-than-expected inflation numbers added to investor optimism after the U.S. and China announced a trade truce on Monday.

The Dow fell, however, with its biggest drag a 17.8% slide in shares of UnitedHealth after the insurance bellwether suspended its annual forecast and its CEO stepped down.

Stocks, oil and bond yields rose, lifted by the optimism surging through markets that the worst of the global trade crisis is past and that the growth outlook is much brighter than it looked only a few days ago.

U.S. stock futures were largely unchanged Tuesday evening after the S&P 500 and Nasdaq closed higher on optimism around the U.S.-China trade deal, and a softer-than-expected consumer inflation print.

NVIDIA Corporation shares closed 5.6% higher on Tuesday after the company announced the sale of 18,000 AI chips to a Saudi Arabian company, Humain. The Saudi-based company intends to use the chips to build its 500 megawatt data centre.

Bond yields finished the day modestly higher, with the 2-year Treasury yield rising to just above the 4% mark while the 10-year Treasury yield climbed to 4.48%.

Headline CPI rose by 0.2% for the month and 2.3% on an annual basis, while core CPI rose by 0.2% in April and 2.8%. The modest increase in core CPI brought the three-month annualised change in core CPI down to 2.1%, the lowest reading since July 2024.

Results have been broadly positive, with roughly 78% of companies announcing better-than-expected earnings with an average upside surprise of 8.6%. Earnings growth is on pace to rise by 13% for the quarter, up from estimates of only 7% at the beginning of April.

India's headline inflation slowed to 3.16% YoY—the lowest since July 2019. With crude oil prices sharply easing, domestic demand softer, and food prices contained, we expect the RBI to cut rates aggressively.

Nifty witnessed profit booking in yesterday's session, falling more than 400 points from intraday highs and closing near the session's low.

As anticipated, Nifty Midcap and Small Cap indices outperformed the Benchmark Indices. We expect this trend to continue as we approach the end of the earnings season, which has been primarily in line with expectations.

Foreign investors have turned aggressive sellers in the cash and derivative markets, which will likely keep markets in check at higher levels.

Nifty is still above its 5 and 10-day EMAs, which indicates a continuation of a positional uptrend. On the downside, strong support for Nifty is placed at 24500 and 24378, while on the upside, 24850 and 24975 could offer resistance.

Opening Bell - Morning Commentary

Markets to digest recent gains

U.S. equity markets rose sharply to start the week, as the United States and China agreed to a 90-day pause on the escalating tariffs placed on each other and will temporarily reduce their respective levies. The two countries announced this in a rare joint statement following high-stakes trade talks over the weekend.

The Dow closed higher by 1,161 points, or 2.81%. The broader S&P 500 gained 3.26%, and the tech-heavy Nasdaq Composite surged 4.35%. The three major indexes each posted their biggest single-day gains in over one month.

Investors showed greater appetite for riskier assets, including stocks. The US dollar rose 1.4% against a basket of currencies. US oil, which had tumbled as investors feared a demand vacuum because of a tariff-induced global recession, surged 1.52% to $61.95 a barrel. Brent crude rose 1.64% to $64.96 a barrel.

Investors sold off safe-haven assets, such as gold, which tumbled 2.7%. US Treasuries also fell, sending the 10-year yield back above 4.45%. Japan’s yen fell 2% against the dollar.

The CBOE Volatility Index, Wall Street’s fear gauge, sank more than 15% to its lowest level since the end of March.

India proposed to impose retaliatory duties on U.S. products under World Trade Organisation norms in response to American tariffs on steel and aluminium, which were implemented as safeguard measures. India stated that its proposed suspension of concessions would result in an equivalent amount of duty collected from products originating in the U.S., aiming to balance the impact of the U.S. measures.

The Indian stock market skyrocketed today, logging its biggest intraday gains in the last four years. The Nifty 50 ended 3.82% higher at 24924.

Nifty surpassed the crucial resistance of 24857 and closed above it. Next resistance for the Index is seen at 25207, which happens to be a 76.4% retracement of the entire fall from 26277 to 21743. Support has now shifted upwards to 24590.

Following yesterday's stupendous rise, Indian benchmark indices will likely consolidate recent gains, while we anticipate continued buyer interest in mid-cap and small-cap stocks at lower levels.

Opening Bell - Morning Commentary

US stocks rose on a trade deal with the UK - Our markets fell as geopolitical tensions escalated.

U.S. equity markets closed higher on Thursday, following a trade agreement between the U.S. and U.K., Which is expected to lower U.S. tariffs on products such as autos, steel, aluminium and aerospace engines imported from the U.K.

This is the first trade agreement with a significant trading partner since the U.S. unveiled its tariff plans on April 2. Although the impact of this agreement will be limited, markets reacted favourably, hoping that it could help provide a framework for further negotiations with other trading partners in the weeks ahead.

The U.K. was responsible for roughly 2% of U.S. goods imports in 2024, and was the destination for approximately 4% of U.S. goods exports.

The Russell 2000 small-cap index rose 1.9% to close at its highest level since April 2, when the tariffs were initially announced.

On the economic front, weekly initial jobless claims fell more than expected last week, suggesting that the labour market remains stable. However, a separate report showed worker productivity dropped in the first quarter for the first time in nearly three years.

Oil prices were little changed early on Friday after rising more than 3% in the previous session, as trade tensions between the top oil consumers, the U.S. and China, showed signs of easing.

Japanese stocks jumped, supported by the dollar's surge against the yen, after a U.S. trade deal with Britain fuelled hopes of progress in tariff talks with other countries. Bitcoin soared to its highest level since January.

Our markets fell yesterday as India-Pakistan border tensions escalated. As we have been alerting our readers, it is prudent to prepare rather than panic. We advise traders to keep leveraged and speculative positions light and use derivatives to hedge short-term exposures.

The Nifty mid- and small-cap indices fell sharply along with the Benchmark indices. The Nifty Midcap 100 Index plunged by 1.95%, while the Nifty Smallcap 100 Index plummeted by 1.43%. Market breadth turned decisively negative, with declining shares significantly outnumbering advancing ones.

The Nifty's short-term trend turned weak as it closed below its 5-day EMA, which was placed at 24340 levels. On the higher side, the 24340-24500 band is likely to act as immediate resistance, while the 23978-23800 could provide immediate support on the downside as markets digest the unfolding geopolitical situation.

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.

Opening Bell - Morning Commentary

Record GST numbers since its launch.

U.S. stocks advanced on Thursday, with the Dow and S&P 500 posting their eighth straight session of gains after strong results from mega-caps Microsoft and Meta eased concerns about artificial intelligence spending.

Microsoft surged 7.6% and closed at its highest level since late January, driven by an upbeat quarterly growth forecast for its cloud-computing business Azure. The gains briefly pushed Microsoft above Apple to become the world's most valuable company.

Meta Platforms gained 4.2% and closed at its highest since April 9 after posting higher-than-expected revenue due to a strong advertising performance.

The results helped allay fears that the massive spending on AI in recent years would not be rewarded, and eased concerns that President Donald Trump's tariffs could dent economic growth.

Shares of Apple and Amazon.com eased in after-hours trading on Thursday, with forecasts, including Apple's estimated tariff costs, disappointing investors after U.S. tech-related shares jumped earlier in the day.

Amazon.com shares were down 2.5% after it reported first-quarter cloud revenue growth and forecast operating income below estimates.

The final S&P U.S. Manufacturing Purchasing Managers Index (PMI) for April held steady at 50.2, compared with forecasts for a drop to 48.5*. The figure remained above the key 50.0 mark, reflecting expansion for the fourth consecutive month.

The Institute for Supply Management (ISM) Manufacturing PMI for April declined modestly to 48.7, reflecting contraction but exceeding expectations for a larger drop to 48.0. Within ISM's components, supplier deliveries and inventories were the most significant positive contributors, while production, employment and new orders were the leading detractors.

Britain's FTSE 100 index edged higher, extending its winning streak to 14 consecutive sessions. Consumer staples and financial shares led the index.

The yen tumbled 1.7% to 145.00 per dollar—its biggest fall this year—after the Bank of Japan's 'dovish hold' on interest rates.

Oil prices recorded the most significant monthly drop in almost three and a half years after Saudi Arabia signalled a move toward producing more and expanding its market share, while the global trade war eroded the outlook for fuel demand.

Indian auto majors reported April monthly sales numbers in line with market expectations, with M&M leading the pack.

India's Goods and Services Tax (GST) collection rose 12.6% Year over Year to an all-time high of about ₹2.37 lakh crore in April. This is the highest monthly collection since the tax was introduced in 2017. GST revenue from domestic transactions rose 10.7 per cent to about ₹1.9 lakh crore, while imported goods were up 20.8 per cent to ₹46,913 crore.

Overall trend for the Nifty remains bullish, as it continues to trade above all key moving averages. Immediate support for the Nifty is placed at 24150, below which it could further fall towards 23870. On the higher side, 24450-24500 band is expected to continue acting as a significant resistance band.