Opening Bell - Morning Commentary

Indian Markets Eye Recovery as Global Sentiment Stabilises

Friday brought welcome relief to major US indices, fuelled by renewed speculation that the Federal Reserve may cut rates in December after dovish remarks from policymakers.

Technology and communication services lagged amid profit-taking that hit AI and cloud leaders, despite strong earnings from Nvidia and Amazon.

Homebuilding stocks rallied sharply on rate optimism, while discount retailers such as Ross Stores surged on strong earnings.

Defensive sectors like consumer staples held up better, cushioning overall losses. The VIX remained elevated in the low-20s as investors weighed Fed easing hopes against growth, tariffs, and labour-market uncertainties.

Back home, the rupee hit an all-time low of 89.67 against the dollar, pressured by subdued risk sentiment, global uncertainties, and delays in the US-India trade deal.

Indian markets drew support from the RBI's export relief measures, though sentiment was dampened by October's widening trade deficit and sharp export contraction. PMI data showed continued expansion despite moderating manufacturing momentum.

Healthy Q2 earnings, robust macro indicators, and reviving FPI inflows—aided by easing inflation and stable crude prices—provided a liquidity cushion for large caps.

Broader markets underperformed.

Nifty fell sharply on Friday, though it remains above its nearest moving average support at 26038. Below 26038, the recent swing low at 25856 is expected to act as a crucial support level, while 26277 remains short-term resistance.

Indian markets have demonstrated resilience in weathering recent setbacks and now appear poised to challenge previous peaks.

Markets are likely to open buoyantly and attempt to break out of the recent consolidation phase today.