Opening Bell - Morning Commentary

Positive Economic Indicators Contribute To Record Highs On Wall Street

The S&P 500 and Nasdaq closed at fresh record highs, extending a strong streak for major indices. Gains were driven by robust U.S. retail sales, upbeat jobless claims, and strong earnings results, especially from tech and consumer firms. With the continued upward move, the Nasdaq and the S&P 500 reached new record closing highs.

The continued strength on Wall Street followed the release of a batch of largely upbeat U.S. economic data, including a Commerce Department report showing that retail sales rebounded by much more than expected in June.

A report released by the Labour Department showed first-time claims for U.S. unemployment benefits unexpectedly dipped to a three-month low in the week ended July 12th.

The Labour Department also released another report showing that import prices in the U.S. inched up by less than expected in June.

The dollar headed for a second straight weekly gain against major peers, buoyed by some solid U.S. economic data that supported the view that the Federal Reserve can afford to wait a while longer before cutting interest rates again.

Netflix topped second-quarter earnings expectations, beating on both the top and bottom lines and raising its full-year revenue guidance as the streamer continues to stand out amid a tech-driven market.

Yesterday, on the weekly expiry session, profit booking set in post a higher opening and continued throughout the day. Nifty finally ended the session with a loss of 111 points or 0.40%, to close at 25111. Nifty failed to sustain 20 DEMA resistance. Nifty is still passing through a choppy trend, where immediate support is seen at 25000; below this level, long bets should be called off. On the higher side, 25250 could act as short-term resistance. The broader market also experienced profit booking, mirroring the benchmark indices.

Indian markets are poised for a muted opening, as sentiment among banking stocks is expected to be especially cautious in response to Axis Bank’s latest financial results, which fell short of market expectations. Notably, Axis Bank's GDR tumbled 4.8% to $ 64.30 on Thursday, following a deterioration in the bank’s asset quality during the June quarter.

Any progress toward finalising trade agreements with the U.S. in the coming days is likely to reduce uncertainty and energise the bulls.