Opening Bell - 07 / 02 / 25

Stock Market Updates

Opening Bell - Daily Morning Commentary

All eyes on Governor Malhotra

U.S. stocks were mixed at the end of choppy session on Thursday as investors digested a spate of earnings. Amazon reported fourth-quarter earnings that topped analysts' estimates, however, its revenue outlook for the first quarter missed projections. Amazon shares were trading lower in extended trading. Honeywell fell after the industrial conglomerate announced it would split into three separate companies and provided downbeat 2025 forecasts.

European shares touched an all-time high, powered by upbeat earnings, interest rate cut and as investors weighed the possibility of a Ukraine peace plan. Bank of England cut its monetary-policy rate by 25 basis points. In the commodity space, WTI oil traded higher as Saudi Arabia's state oil company raised crude prices for March. The U.S. dollar continue to advance versus major currencies.

At the upcoming Monetary Policy Committee (MPC) meeting,*led by *Governor Malhotra, the Reserve Bank of India (RBI) is widely expected to cut the repo rate by 25 basis points. However, this decision remains finely balanced. There are several compelling arguments in favor of a rate cut. Sluggish economic growth, the government’s advance estimates, and recent efforts to boost banking system liquidity create a strong case. Just last week, the RBI announced plans to inject ₹1.5 lakh crore into the banking system, following a December infusion of ₹1.16 lakh crore through a 50 basis point reduction in the cash reserve ratio. Nonetheless, challenges persist. Inflation remains above the RBI’s medium-term target of 4%, and increasing global trade-related uncertainties have added complexity to the economic outlook. The central bank may instead prioritize liquidity measures and defer the rate cut to the April policy review, particularly in light of mounting global uncertainties.

Despite the recent correction of over 200 points from its peak of 23,807, Nifty's short-term trend remains bullish as it holds above its 11 and 20-day exponential moving averages of 23,446 and 23,428 respectively. A sustained break above 23,800 could push the index toward the 24050-24100 resistance zone, while the 23400-23450 range serves as key support.