Indian Stock Market Prepares for RBI Policy Decision Amid Mixed Global Cues-Expect Mildly Positive Opening

Sensex and Nifty continue their cautious trend as investors await the RBI’s monetary policy announcement, influenced by mixed performances in global markets.

February 7, 2025: Indian Stock Market Awaits RBI Policy Decision Amid Global Fluctuations

The Indian stock market remained on edge as investors brace for the Reserve Bank of India’s (RBI) monetary policy decision. On February 6, Gift Nifty traded at 23,710, indicating a modestly positive start for Sensex and Nifty 50. However, mixed global cues and profit booking in rate-sensitive sectors have kept market sentiment cautious.

Domestic Market Performance:

On Thursday, the Sensex dropped 213 points (-0.27%) to 78,058.16, and the Nifty 50 declined 92.95 points (-0.39%) to close at 23,603.35. Investors turned to profit booking in banking, realty, and auto stocks ahead of the RBI’s expected 25 basis points rate cut. Market expert Prashanth Tapse from Mehta Equities suggested that an unexpected rate cut could spark short-term optimism.

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Key Global Market Cues:

1. Asian Markets:
   Most Asian indices traded lower ahead of regional economic data. Japan’s Nikkei 225 fell 0.34%, and South Korea’s Kospi declined 0.26%. Meanwhile, Hong Kong’s Hang Seng futures suggested a positive opening.
2. Wall Street:
   US markets ended mixed on Thursday. The S&P 500 (+0.36%) and Nasdaq (+0.51%) gained, while the Dow Jones Industrial Average (-0.28%) slipped. Notable stock movements included Nvidia (+3.1%), Philip Morris (+10.9%), and Amazon (-4% in extended trade after underwhelming Q1 forecasts).
3. Amazon Earnings:
   Amazon reported Q4 revenue of $187.8 billion, surpassing estimates of $187.3 billion. However, its Q1 forecasts fell short of expectations, leading to a 4% decline in its share price during extended trading.
4. US Unemployment Data:
   Weekly unemployment claims rose to 219,000, slightly above forecasts of 213,000, indicating moderate growth in joblessness.
5. Bank of England:
   The Bank of England cut its interest rate by 25 bps to 4.50%, its third reduction in six months, and halved its 2025 growth projection.
6. Japan’s Consumer Spending:
   Japanese household spending surged 2.7% YoY in December, beating market expectations and signaling robust consumer demand.

Other Market Highlights:

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• Gold Prices:
  Gold steadied near record highs, with spot gold rising to $2,859.59/oz, marking its sixth consecutive weekly gain.
• Oil Prices:
  Brent crude hovered near $90 per barrel as investors anticipated tighter supply amid OPEC’s production cuts.

Market Outlook:

Also Read: Foreign Investors Pull ₹87,300 Crore from Indian Equities in January Amid Global Uncertainty

With the RBI set to announce its last bi-monthly monetary policy of FY25 under new Governor Sanjay Malhotra, analysts expect a 25 bps rate cut to 6.25%. The decision, coupled with global trends, will likely steer the market in the short term.

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