Opening Bell - Morning Commentary
AI Trade Fatigue Weighs on US Indices, Nifty Shows Resilience Despite Global Headwinds.
US indices closed modestly lower on Monday, pressured by large-cap tech and AI-linked stocks. The weakness followed renewed declines in Broadcom and other AI beneficiaries as investor fatigue mounted around the "AI trade."
Stocks opened higher but quickly reversed course, pulling back from early highs and hovering near unchanged levels for most of the session.
Key economic data this week includes the November jobs report and October retail sales today, followed by the November consumer price index on Thursday. These reports could reshape interest rate expectations following last Wednesday's Federal Reserve policy announcement.
Meanwhile, Japanese private-sector surveys indicated that manufacturing contraction eased in December, while services-sector growth slowed, creating headwinds for the economy as 2025 draws to a close.
Oil prices fell in early Tuesday trading, extending Monday's losses, as prospects for a Russia-Ukraine peace deal appeared to strengthen and raised expectations that sanctions could ease.
The U.S. dollar index slipped near a two-month low at the start of Asian trading today as markets awaited key economic data, including the delayed November jobs report.
The rupee weakened for a fourth consecutive day, depreciating by 31 paise to a record low, positioning it as the worst-performing Asian currency.
Nifty briefly slipped below its 20-day exponential moving average (20-DEMA) at 25,965 yesterday but recovered and closed decisively above it, indicating resilience among market participants.
A sustained move above 26,058 would signal a short-term bullish breakout and open the path for higher levels in the range of 26200-26300.
On the downside, the 25,900 level is expected to act as short-term support.
Indian markets are poised to open subdued on weak global cues.