Opening Bell - Daily Morning Commentary

Walmart's forecast dampened investor risk appetite

U.S. stocks sold off on Thursday as ongoing tariff jitters and a downbeat Walmart forecast dampened investor risk appetite.

Dow Jones posted its most significant one-day loss since Jan. 10 — down 450 points, or 1% — while the S&P 500 SPX shed 0.4% after scoring back-to-back record finishes. The Dow had dropped 677 points at its session lows.

Walmart, the world's largest retailer, provided current fiscal year sales and profit forecasts that fell short of analysts' expectations, suggesting dampening consumer demand.

The Conference Board's Leading Economic Index posted a 0.3% decline in January, all but erasing the gains of the prior two months—the first gains since February 2022.

Asian markets are recovering after opening lower on weak US cues. The Bank of Korea will cut its key interest rate by 25 basis points on Tuesday, offering support to an economy that barely grew last quarter. After unexpectedly holding its policy rate steady last month, South Korea's central bank signaled it needed to wait for domestic political turmoil, which weighed on the currency, to stabilize before easing further.

The yen and gold have been primary safe-haven beneficiaries of the emerging Trump agenda. The dollar/yen fell below 150 to its lowest since early December, while gold got within $50 of $3,000 per ounce.

Back home, Nifty fell for the third consecutive session yesterday, weighed down by underperformance in financial heavyweights. Nifty ended the session with a loss of 19 points to close at 22913. The support of 22800 was protected as Nifty made an intraday low at 22812 and recovered from there.

The Indian rupee strengthened by 29 paise, breaking out of a five-day consolidation range. This appreciation was fuelled by dollar selling from foreign banks and the continued unwinding of long positions.

Nifty Midcap and small-cap indices bucked the trend. Considering the strength in the broader markets, it seems that Nifty is headed higher for the next target of 23235. Trading longs should be protected with 22725 Stoploss in Nifty.

Indian markets are likely to open subdued on weak global cues.