06 Feb 2025

Indian Markets Expected to Open Higher Amid RBI Rate Decision Awaiting

Indian equity markets are set to open in positive territory on Thursday as investors anticipate the Reserve Bank of India's (RBI) interest rate decision, scheduled to be announced on Friday. The Monetary Policy Committee is currently in its second day of discussions, with expectations of a 25 basis-point rate cut.

Key Market Factors to Watch:

  • Govt Market Borrowings for FY26 Well-Placed: A report by the State Bank of India (SBI) indicates that the government’s market borrowing plans for FY26 are well-structured to support fiscal and monetary policy.

  • India’s Fruit & Vegetable Exports Surge 47.3%: The Ministry of Commerce & Industry reported a significant 47.3% growth in fruit and vegetable exports between FY20 and FY24.

  • Port & Shipping Industry in Focus: Cargo volumes at Indian ports have been rising in line with economic growth and export expansion.

  • Gold-Related Stocks in Limelight: The World Gold Council reported a 5% year-on-year rise in India's gold demand to 802.8 tonnes in 2024, supported by lower import duties and seasonal purchases.

  • Q3 Earnings to Be Closely Watched: Investors will track third-quarter earnings from major companies, including SBI, Hero MotoCorp, ITC, and Britannia Industries.

Global & Domestic Market Trends:

  • US & Asian Markets: Wall Street ended higher on Wednesday despite mixed economic data and disappointing tech earnings. Asian markets are mostly trading in the green, tracking US gains.

  • Indian Markets on Wednesday: In a volatile session, Indian equity benchmarks fluctuated before closing lower. The BSE Sensex declined by 312.53 points (0.40%) to 78,271.28, while the CNX Nifty fell by 42.95 points (0.18%) to 23,696.30.

Other Key Developments:

  • India Services PMI Declines: The HSBC India Services PMI fell to 56.5 in January from 59.3 in December, marking its slowest expansion in over two years due to softer sales and output growth.

  • Rupee Hits a New Low: The Indian rupee weakened further, plunging 36 paise to 87.43 per US dollar amid global trade war concerns.

  • FIIs Turn Net Buyers: Foreign Institutional Investors (FIIs) bought equities worth RS 809.23 crore on Tuesday after a prolonged selling spree.