Indian Stock Market : 8 Key Things That Changed Overnight Ahead of RBI Policy – Gift Nifty to Amazon Earnings
Indian Stock Market : 8 Key Things: The Indian stock market is set to open on a cautious note on Friday, as investors await the Reserve Bank of India’s (RBI) monetary policy decision. The global market cues remain mixed, with Asian markets trading lower and Wall Street showing a mixed performance. Meanwhile, Amazon’s earnings report and key economic data from Japan, the US, and the UK have also influenced market sentiment.
1. RBI Monetary Policy Decision Today
The most anticipated event for the domestic market today is the RBI’s monetary policy decision. The central bank is expected to cut the repo rate by 25 basis points (bps), bringing it down to 6.25%. This would be the first rate cut under the new RBI Governor, Sanjay Malhotra, as the Monetary Policy Committee (MPC) aims to boost economic growth amid easing inflation.
Ahead of this crucial announcement, rate-sensitive sectors like banking, real estate, and auto stocks saw profit-booking on Thursday. A surprise rate cut could trigger short-term optimism, while a status quo may keep the market subdued.
2. Indian Stock Market Performance on Thursday
On Thursday, the benchmark indices extended their losses for the second straight session. The BSE Sensex declined 213.12 points (-0.27%) to close at 78,058.16, while the NSE Nifty 50 dropped 92.95 points (-0.39%) to settle at 23,603.35.
Despite a strong opening, the market moved in a narrow range and slipped into negative territory as investors booked profits ahead of the RBI policy.
3. Asian Markets Trade Lower
Asian equities remained under pressure on Friday morning, reacting to economic data from Japan and South Korea.
- Japan’s Nikkei 225 fell 0.34%, while the Topix lost 0.32%.
- South Korea’s Kospi dropped 0.26%, and the Kosdaq declined 0.3%.
- However, Hong Kong’s Hang Seng Index futures indicated a higher opening.
Weak sentiment in the region could influence domestic markets, especially in sectors with global exposure.
4. Gift Nifty Indicates Mildly Positive Opening
Gift Nifty, an early indicator of market direction, was trading around 23,710—a premium of about 20 points compared to the previous Nifty futures close. This suggests a slightly positive start for Indian equities, but the overall sentiment will depend on the RBI policy outcome.
5. Wall Street Ends Mixed Amid Earnings and Data
US stocks delivered a mixed performance on Thursday, driven by corporate earnings and economic data:
- Dow Jones fell 125.65 points (-0.28%) to 44,747.63.
- S&P 500 gained 22.09 points (+0.36%) to 6,083.57.
- Nasdaq Composite climbed 99.66 points (+0.51%) to 19,791.99.
Tech stocks like Nvidia (+3.1%) and Eli Lilly (+3.3%) saw gains, while Amazon’s stock dropped over 4% in extended trade.
6. Amazon’s Q4 Earnings Disappoint Investors
Amazon’s stock declined in after-hours trading after the company issued weaker-than-expected guidance for Q1 2025.
- Revenue: $187.8 billion vs. analysts’ expectation of $187.3 billion.
- Net Income: $20 billion (almost doubled YoY from $10.6 billion).
- Earnings Per Share (EPS): $1.86 vs. estimated $1.49.
- Q1 Revenue Outlook: $151 billion – $155 billion (vs. expected $158 billion).
The lower revenue forecast spooked investors, despite strong earnings for the previous quarter.
7. US Unemployment Claims Rise
The number of Americans filing new unemployment claims rose to 219,000, exceeding expectations of 213,000. While this suggests some weakness in the labor market, the overall employment situation in the US remains strong.
8. Global Economic Indicators
Bank of England Cuts Interest Rates
The Bank of England (BoE) cut its interest rate by 25 bps to 4.50%, marking the third reduction in six months. This move comes amid concerns over slowing economic growth in the UK.
Japan’s Household Spending Rises Sharply
Japanese household spending increased 2.7% YoY in December, far surpassing the expected 0.5% growth. This indicates a rebound in consumer demand, which could support Japan’s economic recovery.
Gold Prices Near Record Highs
Gold prices remained firm, set for a sixth consecutive weekly gain:
- Spot Gold: $2,859.59 per ounce (+0.1%)
- US Gold Futures: $2,884.20 per ounce (+0.3%)
Market Outlook for Today
With the RBI policy decision in focus, markets are expected to remain volatile. Key factors to watch include:
- Repo rate decision: A rate cut could boost banking, realty, and auto stocks.
- Global cues: Weak Asian markets and Amazon’s disappointing earnings may weigh on sentiment.
- Gift Nifty trend: Indicates a slightly positive opening.
Key Financial Ratios to Watch:
- Nifty PE Ratio: 22.5 (indicative of market valuation)
- Nifty PB Ratio: 4.5 (reflects market sentiment)
- Nifty Dividend Yield: 1.2% (shows income return from stocks)
Investors should brace for short-term volatility and position themselves accordingly based on the RBI’s policy stance.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.