Opening Bell - Morning Commentary
Strong Data Drive US Markets to Records; Indian Equities Recover Modestly
US stock markets rose during the shortened holiday last week, with the S&P 500 and Dow Jones Industrial Average both reaching record highs. Light news flow and trading volumes characterised the period, though favourable economic data and AI optimism supported positive sentiment.
Investors also processed a delayed BEA release showing that Q3 GDP expanded at a robust 4.3% annualised rate, bolstering growth confidence while moderating expectations for aggressive Federal Reserve rate cuts in 2025.
Key data releases due include weekly jobless claims, pending home sales, and minutes from the Federal Reserve's latest policy meeting.
Indian markets ended the holiday-shortened week marginally higher, snapping a three-week losing streak, though Friday's session closed lower amid profit booking and thin volumes.
Mid-caps and small-caps outperformed. The RBI's liquidity infusion and progress on India-New Zealand free trade talks supported sentiment. Markets will now track India-US trade developments, FII flows, rupee movement, crude prices, and Q3 earnings.
The Indian rupee weakened to close at 89.85 against the U.S. dollar. The fall was attributed to persistent foreign outflows and increased dollar demand from metal importers.
Despite two straight sessions of profit booking, Nifty’s short-term setup remains positive, holding above its 20-day EMA and key gap support placed near the 26,000 level.
Immediate resistance is at 26,145, followed by 26,250. On the downside, a close below 26,000 may trigger further weakness towards 25,880 and 25,770.
Corporate activity remained muted, with no major IPOs, though developments in Adani Group's cement merger remained in focus.
Indian markets are poised to open marginally higher on the back of positive global cues.