Opening Bell - Daily Morning Commentary

Trump's Tariff Move Rattles Global Markets

US Stocks tumbled on Friday afternoon after the White House’s confirmation of tariffs against Canada, Mexico and China would take effect on Saturday. It caught markets off guard as most had been hoping that Trump wouldn't follow through on his earlier threat to impose tariffs on Feb. 1

U.S. Commerce Department data showed that the Personal Consumption Expenditures (PCE) Price Index rose 0.3% last month, the largest increase since last April, amid a surge in consumer spending, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates.

The January nonfarm payrolls report due next week will signal whether the labor market remains buoyant despite high borrowing costs.

Investors have been bracing for further tariff news after Trump has repeatedly warned about using the measure. Uncertainty over the impact of tariffs has muddled the outlook for the economy and inflation.

European markets traded higher overnight following lower-t*an-expected inflation readings in Germany and France.

Pre-Budget optimism fuels markets

Ahead of the Parliament’s Budget session, Prime Minister Narendra Modi invoked goddess Lakshmi during his customary address with a specific mention of the middle class and poor. It fuelled widespread anticipation across India's middle class and corporate sectors as Finance Minister Nirmala Sitharaman prepares to present her eighth consecutive Union Budget. Expectations are high that she will announce changes to income tax slabs, introduce incentives for the new tax regime, and provide home loan exemptions.

Indian markets rallied for the fourth consecutive session on January 31, with the benchmark indexes gaining over a percent amid pre-Budget optimism. If the union budget falls short on measures aimed at stimulating investment and economic growth, markets will not take that kindly.

Market showed significant strength as the Nifty breached key resistance levels, surpassing both its 20-day exponential moving average and the previous swing high of 23,327 and 23,426 respectively. Heading into today’s special budget session, the index faces crucial resistance at the 50-day and 200-day exponential moving averages of 23,681 and 23,622.

A decisive break above 23,681 could propel the Nifty toward 24,000, while 23,426 and 23,327 should provide support in the near term.