Opening Bell - Morning Commentary

Trade Deal Uncertainty Impacts Market Sentiments.

US markets posted solid weekly gains, with the S&P 500 rising 1.1%, the Nasdaq gaining 1.2%, and the Dow advancing 1.3%. The S&P 500 achieved its fifth consecutive record close on July 25, reaching above 6,389 points—its longest winning streak in over a year. The Nasdaq crossed 21,000 for the first time, while the Dow recovered from early-week weakness.

Strong corporate earnings drove the rally, with 83% of S&P 500 companies that reported earnings beating expectations. Technology companies led gains, particularly Alphabet, which delivered better-than-expected results, though Intel's loss warning tempered some sector enthusiasm.

Market volatility declined significantly, with the VIX falling to its lowest level in five months. Bond yields remained stable, while economic indicators, including retail sales and employment data, continued to show resilience.

Trade optimism further boosted sentiment as investors anticipated deals with Japan, Indonesia, and the Philippines ahead of President Trump's August 1 tariff deadline. The upcoming meeting between Trump and European Commission President Ursula von der Leyen has raised hopes for a US-EU agreement. However, Trump's stance appears to have hardened as the deadline approaches.

Investors are now focusing on key economic reports and next week's Federal Reserve policy meeting, which could drive further market moves as earnings season intensifies.

Indian officials maintain cautious optimism regarding a potential U.S. trade deal, though uncertainty prevails with few days remaining before possible tariff increases.

Indian markets continued its southward journey for the fourth consecutive week as trade uncertainty and disappointing corporate earnings weighed on investor sentiment.

Nifty50 dropped 0.5% to 24,837 points, slipping below the key 25,000 level crossed on July 21. The pain was even more acute in the broader market on Friday, with both the Nifty Midcap 100 and Smallcap 100 indices significantly underperforming the benchmark. Market breadth remained weak for the seventh consecutive day, where declining shares surpassed advancers. The advance-decline ratio on the BSE stood at 0.40, the lowest since 19-June.

Nifty violated the previous swing low support of 24882 on closing basis. Positional trend of Nifty has turned bearish as it has also violated its 50 DEMA for the first time since 11th April 2025, which further confirms the weakness in the Indian market. Supports for the Nifty are now seen at 24742 and 24500 levels. On the upside, resistance has shifted down to 25000.

Despite the near-term volatility, underlying economic indicators remain robust, offering bulls reason for optimism about a potential recovery from current levels.

Indian markets are poised to open subdued in line with Asian market cues.