Pre-Market Nifty/Sensex Analysis Today, Dec 05: Nifty, Sensex Likely to See a Muted Start Ahead of Monetary Policy Decision; FIIs Selling Continues

On Friday, December 5, the Sensex and Nifty 50 are expected to open flat ahead of the Reserve Bank of India’s monetary policy announcement, following subdued cues from global markets.

GIFT Nifty hovered near the 26,182 mark, showing a discount of about 7 points over the previous close of Nifty futures. This signalled a muted opening for the Indian equity indices.

In early trade, the majority of Asian markets traded lower, while the US stock market ended mixed overnight.

RBI Policy 

Friday’s market sentiment will hinge on the RBI policy outcome. Expectations point to a status quo on the repo rate at 5.50%, but commentary from the RBI Governor may drive near-term market moves.

Putin’s India Visit

Russian President Vladimir Putin arrived in New Delhi on the evening of 4 December, marking the start of his two-day visit for the 23rd India–Russia Annual Summit. He is set to meet Prime Minister Narendra Modi to discuss key regional and global matters.

Institutional Flows – FIIs and DIIs

On Thursday, December 4, Foreign Institutional Investors (FIIs) were net sellers, selling equities worth ₹1,944.19 crore. Domestic Institutional Investors (DIIs) continued their positive stance, buying equities worth ₹3,661.05 crore, marking their 30th consecutive session of net inflows.

Thursday’s Market Action

Indian equity benchmark indices ended higher on Thursday, December 4, snapping a four-day losing streak as IT stocks rallied on a weaker rupee and growing expectations of a US rate cut next week. 

The Nifty 50 rose 47.75 points or 0.18% to reclaim the 26,000 mark at 26,033.75, while the Sensex gained 158.51 points or 0.19% to close at 85,265.32. India VIX also eased 3.5%.

Wall Street On Thursday  

Wall Street closed Thursday on a mixed note as investors assessed fresh labour-market data and other economic indicators, while optimism around a possible Federal Reserve rate cut next week continued to support sentiment. 

The Dow Jones Industrial Average slipped 31.96 points (-0.07%) to 47,850.94, whereas the S&P 500 inched up 7.40 points (0.11%) to 6,857.12. The Nasdaq Composite advanced 51.04 points (0.22%) to settle at 23,505.14. 

Among major stocks, Nvidia jumped 2.12%, Meta climbed 3.4%, Salesforce gained 3.7%, and Tesla rose 1.73%. In contrast, Amazon dipped 1.4% and Apple declined 1.21%.

US Jobless Claims

Weekly US unemployment claims dropped sharply to their lowest level since September 2022. Initial jobless claims fell by 27,000 to a seasonally adjusted 191,000 for the week ending November 29, well below economists’ expectations of 220,000.

Japanese Bond Yields

Japanese government bonds continued to weaken, pushing yields to levels not seen in 18 years. The 10-year JGB yield edged up 0.5 basis point to 1.94%, and is on track for its biggest weekly rise since March with a 13.5 bps increase.

Dollar Index

The US dollar hovered near a five-week low as markets anticipate a Fed rate cut next week. The dollar index stood at 99.04. 

Gold Prices

Gold prices were largely unchanged as higher US Treasury yields countered the impact of a softer dollar. Spot gold dipped 0.1% to $4,203.89 per ounce, and US December futures edged down 0.2% to $4,233.60 per ounce.

Crude Oil Prices

Oil prices remained stable. Brent crude inched up 0.09% to $63.32 a barrel, while WTI rose 0.07% to $59.71. WTI is on track for nearly 2% weekly gains, supported by expectations of a Fed rate cut, rising US-Venezuela tensions and halted peace talks in Moscow.