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Informist, Thursday, Jul 25, 2024

By Anshul Choudhary

MUMBAI – Trading in domestic equities is expected to be muted Friday, with the benchmark indices likely heading for their first weekly fall after rising for seven weeks straight. After the announcement of the Union Budget, there are no major cues for the market. Analysts expect profit booking in shares to continue, but constant inflows from domestic institutional investors will likely keep the fall limited, as seen in the past few sessions.

Today, the benchmark indices opened lower due to weak global cues, but strong inflows helped them cover most of the fall. The Nifty 50 fell nearly 0.8% early in the trade but recovered to close marginally lower at 24406.10 points. The index ended lower for the fifth straight session with earnings of some major companies and the monthly expiry of derivatives leading to volatility.

Sharp gains in anticipation of the Budget earlier this week are now pushing people to take out their profits as the event is behind us, analysts said. However, they remain positive on equities as the government has not tweaked its capital expenditure plans and has even announced welfare schemes that may support consumption.

The hike in capital gains tax in the Budget is unlikely to deter people from investing in the stock market, analysts said. The increase in capital gains tax is insignificant, and investor focus will remain on macroeconomic indicators and earnings growth, said an equity strategist with a domestic brokerage.

"I expect some consolidation in the near term as broad-based triggers are behind us. Earnings will dictate movement now and more clarity will emerge once monsoon season ends," the equity strategist said. Going ahead, the Nifty 50 is expected to find support at 24150-24200 points and may face resistance above 24500-24550 points.

There is scepticism in the market as the Nifty 50 is able to recover from intraday lows but can't cross its earlier highs, said Kapil Shah, technical analyst at Emkay Global Financial Services. If the Nifty 50 falls below 24150 points, Shah expects the index to fall further to 23800 points.

The market's movement will also depend on earnings, with four Nifty 50 constituents set to report their quarterly numbers on Friday. IndusInd Bank, Power Grid Corp of India, Shriram Finance, and Cipla are among those reporting their Apr-Jun results.

Cipla is expected to report growth in earnings for the June quarter on the back of market share gains in the US, new complex drug launches, and healthy growth in Indian sales, despite a one-time impact of restructuring of its domestic trade generics business. The drugmaker's consolidated net profit is seen rising over 12% from a year ago to 11.18 bln rupees, the average of estimates by 10 brokerage houses shows.

IndusInd Bank's net profit for the quarter ended June is seen rising 9.7% on year to 23.3 bln rupees, according to the average of estimates by 11 brokerage firms. The rise in the bottomline will be aided by net interest income, analysts said.

The net profit of Shriram Finance is seen rising 21.1% on year to 20.29 bln rupees, as per the average of estimates by eight brokerages. Power Grid Corp's net profit is seen in a range of 37.17-40.97 bln rupees.  End

Edited by Ashish Shirke

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