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Opening Bell – Morning Commentary
U.S.–Iran Ceasefire on the Brink; Markets Shift Focus to High-Stakes U.S.–China Summit

U.S. equities continued their record-setting rally overnight, with the S&P 500 and Nasdaq closing at fresh all-time highs of 7,412 and 26,274 respectively. Strength in technology and semiconductor stocks outweighed investor concerns surrounding the collapse of U.S.–Iran ceasefire negotiations.

Market sentiment remains supported by the view that the AI-led investment cycle is still in its early innings, with major chipmakers such as Micron touching new record highs.

Crude oil prices surged after President Trump dismissed Tehran’s counterproposal as “totally unacceptable,” raising fears of renewed geopolitical escalation in the Middle East. Brent crude climbed sharply to $105 per barrel.

Meanwhile, the U.S. 10-year Treasury yield advanced to 4.41% as investors repriced inflation expectations ahead of Tuesday’s April CPI data. Economists expect inflation to print at 3.7% year-on-year.

In currency markets, the euro remained largely unchanged near the $1.18 mark, repeatedly failing to break above key resistance as traders await fresh inflation cues before taking directional positions.

Investor attention is now turning toward the upcoming Trump–Xi summit, expected to cover a wide-ranging agenda including Iran, nuclear policy, trade relations, and artificial intelligence. The meeting is being viewed as one of the most consequential U.S.–China engagements in recent years and could significantly influence global markets, energy trends, and the evolving AI race.

Adding to the significance of the summit, executives from major U.S. corporations including Apple, Boeing, Citi, Tesla, and Meta are accompanying President Trump to China. Their participation underscores the importance of trade normalization and market access in the broader diplomatic agenda.

Back home, the Indian rupee weakened sharply, depreciating by 83 paise to close at a record low amid rising geopolitical tensions and a spike in crude oil prices. The strengthening U.S. dollar and concerns over India’s import bill further pressured the domestic currency.

Domestic sentiment also turned cautious following Prime Minister Modi’s “Nation First” austerity appeal, which urged citizens to reduce fuel consumption and defer non-essential foreign travel in order to conserve foreign exchange reserves.

Indian equities remained under pressure for the third straight session. The Nifty declined 360 points to close at 23,815, dragged lower by elevated crude prices and rupee weakness.

Technically, Nifty is expected to test the crucial 23,800 support level at the open. A decisive breach could accelerate downside momentum toward the 23,550–23,500 zone. On the upside, immediate resistance is seen in the 24,000–24,125 range.

Outlook for Today

Indian markets are likely to open lower, tracking weak global cues, rising crude prices, and continued geopolitical uncertainty.😳😳

# Opening Bell – Morning Commentary

# # India’s Markets Simmer Under Global Heat; PM Modi Appeals for Austerity

Global markets extended their rally last week, with Wall Street benchmarks scaling fresh record highs amid strong earnings growth and resilient economic data.

The S&P 500 and the NASDAQ recorded their sixth consecutive weekly gains, supported by better-than-expected corporate earnings and optimism surrounding artificial intelligence-led growth. The NASDAQ surged 4.5% during the week, while the S&P 500 advanced 2.4%. The Dow Jones Industrial Average underperformed relatively, ending with only marginal gains.

Investor sentiment was further boosted by a robust April employment report in the United States. The US economy added 115,000 jobs during the month, significantly ahead of market expectations of 55,000 jobs. March payroll numbers were also revised upward to 185,000. Meanwhile, the unemployment rate remained steady at 4.3%, indicating continued resilience in the labour market.

Corporate profitability has also strengthened sharply. Analysts now expect first-quarter earnings growth for S&P 500 companies to rise by nearly 27.7% year-on-year — the strongest pace since the fourth quarter of 2021. Notably, earnings growth expectations had stood at just 13.1% at the end of March, highlighting the magnitude of positive surprises this season.

Energy has emerged as the strongest-performing sector globally in 2026. The S&P Energy Select Sector Index has gained nearly 25% year-to-date, supported by Brent crude prices moving above $105 per barrel amid supply disruptions and rising geopolitical tensions.

However, elevated energy prices are also intensifying inflationary concerns. Recent data showed US inflation accelerating to 3.3%, prompting several major financial institutions to push expectations for interest rate cuts further into 2027. Some analysts are now even assigning higher probabilities to possible rate hikes later this year if inflationary pressures persist.

Consumer sentiment in the United States continues to weaken under the weight of rising prices. The University of Michigan’s preliminary consumer sentiment index for May declined to 48.2 from April’s final reading of 49.8, both substantially below February’s recent high of 56.6.

Market participants are now closely watching Tuesday’s US Consumer Price Index (CPI) release for further direction. The previous CPI report showed annual inflation rising to 3.3% in March from 2.4% in February, with energy prices surging 12.5% year-on-year.

Across Asia, South Korea’s Kospi touched another record high on Monday, leading gains in regional markets as investors monitored rising oil prices and escalating geopolitical tensions involving the United States and Iran.

Indian equity benchmarks, meanwhile, ended last week on a cautious note. The Nifty 50 slipped around 0.6% to close near 24,176, while the Sensex declined approximately 0.7% to around 77,700. Profit booking in heavyweight stocks and persistent foreign institutional outflows weighed on market sentiment.

In a significant development domestically, Prime Minister Narendra Modi, while addressing a public gathering in Hyderabad, urged citizens to adopt austerity measures to help reduce pressure on India’s foreign exchange reserves.

The Prime Minister encouraged Indians to revive pandemic-era practices such as work-from-home arrangements and virtual meetings to reduce fuel consumption. He also appealed to citizens to postpone non-essential gold purchases for at least one year in the national interest and advised against unnecessary foreign travel, including overseas vacations and destination weddings.

Additionally, he called for reduced edible oil consumption, linking the initiative to both health benefits and economic savings. PM Modi further encouraged greater use of public transportation, electric vehicles, and Made-in-India products.

The government’s concerns come amid rising crude oil prices and heightened global uncertainty, both of which are increasing pressure on India’s import bill and foreign exchange reserves.

On the global front, US equity futures traded lower on Monday morning after Friday’s record-setting session. Investor sentiment weakened following reports that a proposed peace initiative relating to the Iran conflict had been rejected, raising fears that the Strait of Hormuz could remain disrupted.

Going ahead, Indian markets are expected to remain in a consolidation phase. Analysts expect the Nifty to oscillate within a broad range of 23,800–24,400 in the near term. Market direction will likely depend on foreign institutional flows, crude oil prices, inflation data, and any fresh policy measures from the government or the Reserve Bank of India.

Indian markets are likely to open lower today amid weak global cues and rising geopolitical concerns.

Reports: Government Clears DySP Adil Mushtaq of All Charges, Orders Reinstatement

Emergency Visit: Health Minister Sakina Masood Itoo at SMHS Hospital.