Opening Bell - Morning Commentary

U.S. Stocks Pull Back Sharply Amid Renewed Trade Concerns, India Awaits a Trade Deal.

Shares on Wall Street fell after Trump sent letters to 14 countries, including Japan and South Korea, unveiling sharply higher tariffs on imports into the United States, while also postponing their implementation to August 1.

The imposition of a 25% levy on U.S. importers of all goods from key allies Japan and South Korea rattled Wall Street, with the S&P 500 Index dropping sharply; however, markets in Asia took the latest news in stride.

Trump also announced separately that countries aligning with specific policies of the BRICS bloc of developing countries would face an additional 10% tariff.

WTI oil traded higher amid a tight supply market despite OPEC+ hiking output more than expected at its July 6 meeting.

Trump mentioned that the US is close to making a trade deal with India. We believe that if the India-US trade deal is announced, Indian markets will experience a relief rally, even if the deal's terms differ from initial market expectations, the simple removal of uncertainty around higher tariffs should drive this positive response.

Nifty consolidated in the narrow range of 80 points throughout the session yesterday. The short-term trend of the Nifty remains positive, as it is positioned above its important moving averages. Immediate support for the Nifty is now seen at 25,331, while resistance is expected to stay in the range of 25,600-25,670, as the market awaits clarity on the evolving global trade landscape.

Indian indices are poised to open lower, in line with cues from the US market, and are likely to track developments related to the US-India trade deal.