Opening Bell - Morning Commentary

US Markets End Choppy Trading Day at New Record Closing Highs

After moving modestly higher early in the session, stocks turned into a relatively lackluster performance over the trading day on Monday. Despite the choppy trading, the Nasdaq and the S&P 500 reached new record closing highs.

The early strength on Wall Street came amid news that the U.S. and the European Union had struck a last-minute trade agreement, as well as reports suggesting that the U.S. and China are likely to extend their tariff truce for another 90 days.

Markets absorbed news of a 15% U.S.-EU tariff deal, halving previous threats and adding certainty. The subdued move signals investors had already priced in an accord after last week’s Japan agreement, though relief remains a market tailwind.

The Dow Jones Industrial Average slipped by 0.14%, the only primary U.S. index to post a loss. The S&P 500 closed marginally higher to post its sixth consecutive record close, while the technology-heavy Nasdaq Composite rose 0.33%. This divergence reflects shifts away from traditional industrials toward technology and growth sectors.

A looming flood of earnings, including top tech names, plus the Federal Reserve’s policy meeting, is keeping risk appetite in check.

Investors are monitoring for signals on U.S. economic resilience and interest rate direction as volatility could rise.

Asian stocks are largely trading in the red after a flat session on Wall Street, as investors stayed cautious amid a week loaded with important economic data releases and corporate earnings.

Back home, Nifty experienced its third consecutive session of declines yesterday, falling by 156 points (0.63%) to close at 24680. The pain was even more in the broader market, with both the Nifty Midcap 100 and Smallcap 100 indices continuing their underperformance with respect to the benchmark. Market breadth remained weak for the eight consecutive days, where declining shares outnumbered the advancing ones. The advance-decline ratio on the BSE stood at 0.44, reaffirming the pervasive bearish sentiment.

Indian Rupee continued its falling spree, depreciating another 16 paise against the greenback to close at 86.67. This marks its lowest level since June 23rd. The weakening Rupee is largely attributed to a strengthening dollar and persistent foreign fund selling in the Indian market.

Three Nifty companies – Asian paints, Larsen & Toubro and NTPC are going to declare their quarterly results today.

Nifty remains in a short-term downtrend. The next significant support level for the index is seen near 24,500. On the upside, the previous swing low support of 24,882 is now expected to act as a crucial resistance level, indicating that any recovery attempts might face stiff selling pressure around that mark.

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