With US markets ending flat and Asian markets sliding early in the day, Indian equities may see a dull start. Even so, the expectation that the Reserve Bank may cut the repo rate by 0.25% could help the market begin on a stronger note. The monetary policy will be announced at 10 AM by governor Sanjay Malhotra.
If the Reserve Bank chooses not to cut rates, market sentiment could weaken. Policymakers may question the need for a rate cut when GDP growth is already high. There is also speculation that the Reserve Bank may revise its GDP forecast upward for the current financial year, as other agencies have already moved their numbers above 7.5%. Growth in the first half has been around 8%. Inflation projections may also see adjustments.
Investors will pay close attention to any comments on the rupee, as this could influence the currency’s direction for the next few sessions.
Putin’s visit to India is another key event the market is watching, particularly to see what announcements may follow.
Meanwhile, news that a US delegation will visit next week for trade agreement discussions has provided the market some relief.
Gift City derivatives showed Nifty closing at 26,177.50 on Thursday night. It rose to 26,197 in early Friday trade before slipping slightly. The trend suggests that Indian markets may open with mild gains.
European indices closed higher on Thursday. Inditex, the owner of Zara, gained another 2.7% after a strong rally the previous day. Hugo Boss slipped again, while Volvo declined on poor sales. Stellantis rose 4% after increasing its market share by 120 points.
With no strong triggers, US markets drifted through the session. The Dow Jones slipped marginally, while the S&P and Nasdaq saw slight gains. Cryptocurrencies fell again, adding pressure to tech stocks. Weekly jobless claims came in lower, but this did not influence markets much.
Investors are now waiting for the Personal Consumption Expenditure data and the University of Michigan’s consumer sentiment index. Shares of Nvidia, Microsoft and Broadcom declined, while Salesforce rose on expectations of stronger software sales. Meta Platforms gained nearly 4% after announcing layoffs.
Talks on Ukraine did not impact Wall Street, as markets were not expecting a breakthrough.
On Thursday, the Dow Jones closed 31.96 points (0.07%) lower at 47,850.94. The S&P 500 ended 7.40 points (0.11%) higher at 6857.12 and the Nasdaq Composite closed 51.04 points (0.22%) higher at 23,505.14.
US futures were mildly positive on Friday morning, with the Dow up 0.04%, the S&P up 0.10% and the Nasdaq up 0.19%.
Asian markets declined on Friday. Japan’s Nikkei, which had jumped 2.5% the previous day, fell 1.5%. Australia traded with marginal gains. South Korea’s Kospi slipped in early trade. Hong Kong fell 0.60% and China declined 0.25%.
Uncertainty over whether the Reserve Bank will cut rates, revise GDP expectations or adjust inflation forecasts kept Indian markets volatile on Thursday. After opening lower, indices rose sharply, then fell, then recovered again to close with slight gains. The broader market, however, weakened. Foreign investors were heavy sellers once again.
Nifty moved between 25,938 and 26,098, while Sensex fluctuated between 84,949 and 85,487 before closing slightly lower. Sectors such as IT, realty, FMCG, auto, defence and pharma performed well.
Foreign investors sold shares worth ₹1,944.19 crore on Thursday, while domestic institutions bought shares worth ₹3,661.05 crore.
Sensex closed 158.51 points (0.19%) higher at 85,265.32. Nifty gained 47.75 points (0.18%) to end at 26,033.75. Bank Nifty slipped 59.55 points (0.10%) to close at 59,288.70. The Midcap 100 index fell 0.03% and the Smallcap 100 index declined 0.24%.
Market breadth remained weak. On BSE, 1,732 stocks advanced while 2,418 declined. On NSE, 1,373 stocks rose and 1,731 fell.
On NSE, 38 stocks hit 52-week highs while 229 hit 52-week lows. Six stocks were in upper circuit and four in lower circuit.
Traders say Nifty staying above 26,000 boosts sentiment. As long as it remains above 25,900, targets may shift toward 26,100–26,300. Support is seen at 25,960 and 25,860, while resistance may appear at 26,090 and 26,180.
IndiGo continued to face disruptions with hundreds of flights cancelled. Shares of InterGlobe Aviation fell again and analysts expect further weakness.
Cayns Technologies reported strong growth figures, but brokers flagged inconsistencies, leading to a fall in the stock. Kotak Institutional Equities, BNP Paribas and Investec expressed concerns. The stock fell 6.32% on Thursday and has dropped about 11% in five days.
The Securities and Exchange Board of India barred Avdhut Sathe, Gauri Sathe and Avdhut Sathe Trading Academy for offering investment services without SEBI registration. They had collected ₹601 crore from 3.37 lakh people. SEBI has ordered them to refund ₹546 crore.
S&P upgraded Reliance Industries’ rating to AA minus, projecting that 60% of cash flows will now come from digital and retail businesses, while oil and gas will contribute 40%. Citi set a target price of ₹1,805 and Jefferies set ₹1,785, both recommending buying the stock.
British-American Tobacco will sell its 7% stake in ITC Hotels through a block deal on Friday.
Zen Technologies won a ₹120 crore defence ministry contract for simulator systems.
Gold and silver prices remained volatile ahead of next week’s US Federal Reserve interest-rate decision. Gold dropped from 4,220 dollars per ounce to 4,175 dollars before recovering to 4,209.20 dollars. It slipped again to around 4,200 dollars in early Friday trade. The domestic price in Kerala fell twice, dropping a total of ₹680, bringing 22-carat gold to ₹95,080 per sovereign.
Silver moved between 58.79 dollars and 57.17 dollars per ounce before opening near 57.15 dollars. The holiday price rose to 59.12 dollars. Platinum traded at 1,646 dollars, palladium at 1,426 dollars and rhodium at 7,800 dollars.
The Reserve Bank has approved silver and silver jewellery as collateral for loans, similar to gold. The rule will take effect next April, and guidelines are being finalised. Banks and NBFCs will be allowed to accept silver as security. A preliminary order was issued last month and detailed rules will be published soon.
India’s silver purchases have surged sharply in recent years. The country imported over 4,000 tonnes last year. In October alone, silver imports cost 272 crore dollars, compared with 43 crore dollars a year earlier. Over the past five years, Indians have bought around 29,000 tonnes of silver jewellery and 4,000 tonnes of coins, according to Metals Focus.
Gold loans currently make up about 2% of bank lending in India. Silver loans may expand this space further.
Industrial metals climbed again. Copper rose 0.31% to 11,472 dollars per tonne. Aluminium gained 0.54% to 2,907.15 dollars. Nickel, lead and tin also rose, while zinc slipped.
Rubber prices fell 0.64% in international markets to 171.30 cents per kilogram. Cocoa increased 0.86% to 5,500 dollars per tonne. Coffee rose 1.59% and tea gained 0.30%. Palm oil dropped 1.20%.
The dollar index climbed back above 99. It settled at 98.99 on Thursday and moved up to 99.04 in early trade.
The dollar weakened against major currencies. The euro rose to 1.1653 dollars, the pound to 1.3328 dollars and the Japanese yen strengthened to 154.95 yen per dollar. The US dollar remained steady at 7.07 yuan.
US bond prices fell, pushing yields higher. The 10-year Treasury yield rose to 4.09%.
The rupee continued to fluctuate. After touching 90.42 per dollar on Thursday morning, it settled at 89.98 by the close. The Reserve Bank intervened only modestly. Markets expect governor Sanjay Malhotra to comment on the rupee in his policy statement. Analysts believe the government and the Reserve Bank are not resisting the rupee’s decline, as a weaker currency may support exports when overseas demand is uncertain.
The higher dollar index and the monetary policy announcement are likely to influence the rupee further. Any India–Russia agreement on oil trading or rupee–ruble settlements could also affect the currency. The upcoming US delegation visit may offer some temporary support.
China’s yuan eased from 12.77 rupees to 12.71 rupees on Thursday.
Crude oil prices climbed as peace talks on Ukraine failed. Brent closed at 63.34 dollars and opened near 63.29 dollars on Friday. WTI traded at 59.67 dollars and Murban crude from the UAE rose to 65.06 dollars. Natural gas increased to 5.093 dollars.
Cryptocurrencies weakened further. Bitcoin fell below 92,500 dollars. Ether hovered above 3,160 dollars. Solana dropped to about 140 dollars.
