The Morning Edge – All Eyes On Nvidia 

Investors are bracing for heightened volatility ahead of Nvidia’s earnings report on Wednesday—a potential catalyst that could unsettle a market enjoying an extended period of relative stability. All eyes will be on the demand for Nvidia’s expensive AI chips, as scepticism grows over whether the industry’s heavy spending is justified amid emerging low-cost alternatives from China’s DeepSeek. Once a key beneficiary of an AI-fuelled spending surge by major tech companies over the past two years, Nvidia now faces mounting questions about the necessity of its premium hardware in the evolving AI landscape. DeepSeek’s rapid rise in January contributed to a staggering $593 billion loss in Nvidia’s market value on a single day—the largest one-day decline for any US company—even as its shares had been among the best performers in 2023 and 2024.

Data

India’s technology sector is poised for stronger growth this fiscal year, with revenue expected to rise 5.1% to $282.6 billion in fiscal 2025, up from 4% the previous fiscal year. In fiscal 2026, revenue will go over $300 billion driven by growth in engineering research and development and the expansion of global capability centres, or low-cost offshore hubs, industry body NASSCOM said on Monday.

Leading IT firms like Tata Consultancy Services, Infosys, and HCL Tech have reported early signs of a recovery in discretionary spending and improving demand, marking a turnaround after a challenging 2024 when growth nearly halved due to client spending cuts and delayed decision-making. 

Markets

Overnight
US stocks ended mixed on Monday with Nasdaq Composite falling  over 1%, marking its third straight decline, while the S&P 500 edged slightly lower for its third consecutive drop. The Dow managed a marginal gain, bucking the broader trend. US tech sector particularly Nvidia, dragged the Nasdaq as investors grew cautious about AI demand ahead of Nvidia's earnings report Wednesday. Apple rose 0.7% after announcing plans to invest $500 billion in the US over the next four years, including building an AI server factory in Texas. Investors grew increasingly anxious about economic growth, fuelled by weak recent data, a disappointing Walmart forecast, and lingering concerns over tariffs and inflation.

US Treasury yields edged lower on Monday as investors weighed the risks of stagnating US economic growth alongside persistent inflation. In the absence of major data releases, market attention remained fixed on last week’s developments, including weak economic indicators and shifting Federal Reserve expectations. The yield on the benchmark 10-year note fell 1.8 basis points to 4.402%, reflecting cautious sentiment and a flight to safety amid lingering economic uncertainties.

The US dollar index slipped 0.07% to 106.57 on Monday, hovering near its lowest level since December 10, as the euro pared gains following a brief rally tied to Germany’s election results. While Friedrich Merz’s conservative party emerged victorious, as expected, uncertainty over coalition talks and a potentially obstructive parliament weighed on the euro. The dollar index has now fallen more than 3% from its January peak, reflecting broader market shifts and fading safe-haven demand amid evolving political and economic dynamics.

Brent crude Oil prices moved higher, driven in part by speculation that a potential peace deal in Ukraine could ease sanctions on Russia and boost its fuel exports. Brent crude climbed to $74.78 per barrel, settling 0.47% higher on the day. The gains reflect market optimism over improved supply prospects, though geopolitical uncertainties continue to loom large.

 

Day’s Ledger

Economy

• Germany October-December GDP Data
• US Johnson Redbook Weekly Retail Sales Index
• US December House Price Index
• US February Consumer Confidence Index 

Companies

• Equinox India Developments to consider fund raising plans
• Rain Industries to announce December quarter earnings

Policy

• US Federal Reserve Vice Chair Michael Barr Speaks
• German Bundesbank President Nagel Speaks
• Bank of England MPC Member Pill Speaks
• PM Modi to inaugurate the Advantage Assam 2.0 Investment and Infrastructure Summit 
• Day 2 of Global Investors Summit, Madhya Pradesh.

Tickers

• UPL Ltd’s subsidiary, UPL Holdings Brazil BV, has made an additional investment of $53.85 million in Sinova Inovações Agrícolas S.A. Sinova is an associate entity of UPL Brazil. 
• WELSPUN CORP has incorporated a wholly owned subsidiary, Welspun Europe S.A., in Spain, Europe.
• OIL AND NATURAL GAS CORPORATION will make an investment of ₹12 billion in ONGC Green (OGL) via a rights offer. 
• NTPC’s subsidiary NTPC Green Energy, has signed multiple MoUs with the Madhya Pradesh government to invest over ₹2 trillion in Madhya Pradesh. 
• TEXMACO RAIL & ENGINEERING has entered into a strategic Memorandum of Understanding with Polish technology entity Nevomo for work in high-speed rail solutions and predictive track maintenance.
• IREDA shareholders approved a plan to raise up to ₹50 billion through a qualified institutions placement of equity shares. 
• BIOCON's subsidiary has launched the Yesintek biosimilar in the US. Yesintek is approved for the treatment of Crohn’s disease, ulcerative colitis, plaque psoriasis, and psoriatic arthritis.
• DIPNA PHARMACHEM board has approved proposal to raise funds up to ₹1 billion via the issuance of convertible warrants.

Must Read

• Adani Group to invest ₹1.1 trillion across multiple sectors in Madhya Pradesh; investment for smart city project, airport in talks
• RBI allows greater operational flexibility to UCBs on lending norms
• NHAI identifies 24 road assets to be monetised in 2025-26
• Indian IT industry likely to cross $300 billion in FY26, says Nasscom
• India's NTPC plans to invest more than $23 billion on renewable energy in Madhya Pradesh
• Nestle India considering price hikes to counter commodity inflation, executive says
• UK and India relaunch trade talks in Delhi
• KKR picks up 54% stake in cancer hospital chain HCG for ₹34.65 billion
• ONGC approves ₹12 billion investment in ONGC Green for PTC Energy acquisition
• DBS CEO Sees Job Cuts of 4,000 Temp Staff as AI Replaces Roles
• Apple Will Add 20,000 US Jobs Amid Threat from Trump Tariffs
• Starbucks to cut 1,100 corporate roles in CEO Niccol's turnaround push
• Only fools think Elon is incompetent
   

Daily Mantra

A peaceful and composed mind is the master key to overcoming every challenge in life. A pure heart is the greatest temple in the world. Don’t believe the smiling face, but believe the smiling heart. They are very rare in this world.