India’s benchmark indices, Sensex and Nifty 50, may open on a muted note Friday as investors react to mixed overnight global market signals and await the Reserve Bank of India’s monetary policy announcement.

While Asian markets traded in the green, US stocks closed lower overnight, with all three major indices finishing in the red.

Furthermore, RBI Governor Sanjay Malhotra is scheduled to announce the Monetary Policy Committee’s decision later today. Most economists anticipate the MPC will reduce the repo rate by 25 basis points, bringing it down to 5.75% from 6%, marking the third consecutive rate cut.

However, on Thursday, Indian equity markets posted gains, driven by broad-based buying, with both benchmark indices rising over 0.5%.

Domestic Market Recap

On Thursday, Indian indices closed in the green:

• Sensex gained 443.79 points (0.55%) to close at 81,442.04
• Nifty 50 moved up by 130.70 points (0.53%) to settle at 24,750.90

Gift Nifty

Gift Nifty was trading near 24,845, around 16 points lower than the previous Nifty futures close, hinting at a negative start for Indian markets.

Wall Street Performance

Moreover, the US stock market closed lower on Thursday after a volatile session, dragged down by a sharp decline in Tesla shares.

• Dow Jones Industrial Average slumped by 108 points (0.25%) points to close at 42,319.74.
• S&P 500 down by 31.51 points (0.53%), ending at 5,939.30.
• The Nasdaq Composite was trading lower by 162.04 points (0.83%), finishing at 19,298.45.

Gold Prices

• Spot gold gained by 0.3% to $3,361.36/oz 
• US gold futures up by 0.3% to $3,384.40

Overnight Major Global Events Driving Sentiment

1. US Jobless Claims: Initial jobless claims in the US rose to a seven-month high, increasing by 8,000 to a seasonally adjusted 247,000 for the week ended May 31. This exceeded economists’ forecast of 235,000, according to Reuters.
2. US-China Trade Talks: US President Donald Trump and Chinese President Xi Jinping held a phone call on Thursday, as confirmed by China’s Foreign Ministry. Trump described the discussion as “very positive” on social media and said lower-level trade talks between the two nations would continue.
3. Tesla Stock Declines: Tesla shares plunged 14.26% to $284.70 following an escalating public dispute between CEO Elon Musk and President Trump over the new US tax bill. Tesla has dropped in four of the last five sessions, shedding nearly $150 billion in market value amid the controversy.
4. ECB Rate Decision: The European Central Bank (ECB) cut its key deposit rate by 25 basis points to 2%, marking its seventh consecutive rate cut. However, the ECB signalled a potential pause in its year-long monetary easing cycle.

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