Opening Bell - Morning Commentary
US Equities Advance on Softer Inflation, Fed Cut Expectations. Indian Equities Hold Steady Following RBI Rate Cut
American equities posted modest, broad-based gains last week, supported by softer inflation data and resilient macroeconomic indicators that sustained expectations of Federal Reserve rate cuts.
Investors positioned cautiously ahead of the upcoming FOMC meeting, additional inflation releases, and year-end portfolio adjustments.
Beyond Wednesday's Fed decision, central banks in Australia, Brazil, Canada, and Switzerland also meet this week, though no rate changes are expected outside the Fed.
US stock futures are trading slightly subdued after two weeks of gains that pushed the S&P 500 to record weekly closes.
Oil prices hovered at two-week highs on Monday as investors expect a Federal Reserve interest rate cut this week that will lift economic growth and energy demand while eyeing geopolitical risks that threaten oil supplies from Russia and Venezuela.
Indian stock markets delivered a flat weekly performance, closing near record highs despite mid-week volatility.
The Reserve Bank of India's 25 basis-point policy repo rate cut on December 5—its first reduction in six months—buoyed sentiment, alongside an upgraded FY26 GDP forecast to 7.3% and a lowered inflation projection.
Broader markets underperformed significantly, with the BSE Mid-Cap and Small-Cap indices declining 1.25% and 1.84% respectively last week, as foreign portfolio investors continued their selling streak.
Nifty resumed its uptrend on Friday after reclaiming levels above its near-term resistance placed near 26,100.
Immediate resistance is now seen around 26,300, followed by 26,500, while on the downside, the 25,950–26,000 band is expected to act as a crucial support zone.