Opening Bell - Daily Morning Commentary

Asian shares slipped on the threat of a broader global trade war.

All three major US stock indexes swung between losses and gains before turning positive in the final minutes of trading.

The S&P 500 edged to a new record close in a shortened holiday week. The market faces several key factors: the end of earnings season, upcoming Federal Reserve minutes, and ongoing global trade tensions. US Quarterly earnings season is nearly complete, with 74% of the 383 S&P 500 companies reporting fourth-quarter results beating expectations.

The Federal Reserve will release minutes from its January meeting today. At that meeting, officials kept interest rates unchanged amid inflation concerns and uncertainty over Trump's proposed tariffs.

Fed officials have maintained a consistent message. Philadelphia Fed's Harker and Governors Bowman and Waller cited economic strength and high inflation as reasons to maintain current rates. San Francisco Fed's Daly emphasized the need for more apparent progress toward the 2% inflation target before considering rate cuts.

Most Asian equities slipped in early trade as the threat of a broader global trade war and geopolitical uncertainty outweighed a rally in chipmakers.

Nifty ended the session with a minor loss of 14 points to close at 22945, honouring the crucial 22800 support. The Nifty small-cap Index resumed its downward journey, plunged by 1.59% to close at its lowest level since 26 March 2024.

A potential reversal signal would be a move above the 5-day EMA, currently placed around 23,020. Sustained trading above this level could trigger a pullback towards 23,235. Conversely, a break below 22,725 could reignite the downtrend.