Opening Bell - 16 / 04 / 25

Opening Bell - Morning Commentary

Tariff uncertainty keeps global investors on edge

U.S. stocks ended slightly lower on Tuesday as tariff uncertainty remained high, shares of consumer and healthcare companies eased, and upbeat bank results provided some support.

After a few weeks of intense volatility, US markets remained relatively quiet. The Cboe Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” dropped below 30 after spiking to around 60 last week. The Dow fell 0.38%, the S&P 500 lost 0.17%, and the Nasdaq was flat.

Companies like J.P. Morgan, Goldman Sachs, Morgan Stanley, and Citibank have all reported earnings thus far. These big banks have surpassed earnings expectations, primarily driven by higher equities and fixed income trading revenue.

The S&P 500 remains down 12.2% from its February 19 record-high close and down about 8% for the year to date.

The tariff backdrop remains fluid, and the uncertainty has weighed on financial markets. Nvidia would take $5.5 billion in charges after the U.S. government limited exports of its H20 artificial intelligence chip to China, a key market for one of its most popular chips. China also halted purchases and deliveries of Boeing jets and aircraft equipment from the United States.

The New York State manufacturing index rose more than expected, and import prices surprisingly fell.

In Europe, luxury stocks fell sharply after LVMH reported declining sales, reflecting the toll of growing trade tensions and weakening Chinese demand.

Investors are wary that the US government opened new investigations into potential tariffs on pharmaceutical and semiconductor imports, adding another layer of uncertainty for markets already rattled by tit-for-tat trade measures.

China’s economy expanded faster than expected in the first three months of 2025, though its outlook is deteriorating rapidly due to Donald Trump’s massive tariffs. According to data released by the National Bureau of Statistics on Wednesday, China’s gross domestic product grew 5.4% in the first quarter from a year ago. That’s better than the 5.2% consensus estimate.

Asian indices have started negatively today, with Japan's Nikkei 225 tumbling half a per cent and South Korea's Kospi and Kosdaq indices also lower. Hong Kong's Hang Seng gauge slipped around a per cent, while Taiwan's benchmark index also reported losses.

India's consumer price inflation fell to a 67-month low of 3.34 per cent in March, a figure last seen in 2019. The easing inflation comes as a result of food inflation declining further, with economists firming up their expectations of a further rate cut in the June policy meeting of the Reserve Bank of India.

India Meteorological Department (IMD) has projected an above-normal monsoon for 2025, forecasting precipitation at a minimum of 105% of the long-period average in its initial Southwest Monsoon estimate.

Technically, the Nifty has decisively reclaimed levels above its 20, 50, and 100-day moving averages, a clearly encouraging sign for the bulls. Looking ahead, the next significant resistance level for the Nifty appears to be around 23869, which coincides with the previous swing high. On the downside, the 22900-23000 zone is likely to provide immediate support for the index.

Indian markets are expected to retreat marginally at the opening, pressured by tepid global sentiment and in the wake of yesterday's impressive surge.