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Opening Bell - Morning Commentary
Do not predict, prepare.
U.S. stock markets rallied significantly, with all major indices posting substantial weekly gains as reports suggested easing trade tensions between the U.S. and China. Potential agreements with other trading partners further bolstered market sentiment.
The Nasdaq Composite led with a 6.7% surge, powered by tech giants Nvidia and Alphabet, while the S&P 500 rose 4.6% and the Dow Jones Industrial Average gained 2.5%.
Despite this upswing, investor caution persisted as President Trump's administration continued demanding substantial concessions from China, tempering expectations for a quick resolution to trade disputes.
The Tamil Nadu government introduced a bill on Saturday seeking to protect people from the coercive actions of money lending entities. This may impact business growth and raise collection/credit costs for microfinance players.
Geopolitical tensions between India and Pakistan continue to weigh on sentiments. Forecasting possible geo-political flashpoints or accurately assessing their cascading repercussions globally is challenging. Rather than attempting to predict the unpredictable, a more prudent approach is strategic preparation. For investors, this translates to building resilience within their portfolios to withstand potential geopolitical shocks and avoiding overly speculative positions based on uncertain outcomes.
Maintaining adequate liquidity is vital. This allows flexibility to either capitalise on distressed asset opportunities that may arise during turmoil or to navigate adverse market conditions effectively, providing a buffer against unforeseen eventualities.
After rising more than 2600 points from the recent swing low of 21743, Nifty seems to have registered a running correction. A breach of 23847 in subsequent sessions could lead to a further fall towards the next support at 23500. On the upside, 24150 and 24365 could offer resistance in the Nifty.
Preparedness, not prediction, is the key. |