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Informist, Wednesday, Jan. 15, 2025

By Anshul Choudhary

MUMBAI – Indices are likely to be volatile Thursday amid the weekly expiry of derivatives contracts and quarterly earnings of three index heavyweights, Reliance Industries, Infosys and Axis Bank, analysts said. Investors are also likely to react to the US CPI data, due later Wednesday.

The market is cautious of the CPI data as the US non-farm payroll data for December came in above expectations last week, leading to a sell-off in global equity markets. According to the Wall Street Journal, US CPI in December is likely to rise 2.9% on year, higher than 2.7% in November.

Earnings of Reliance Industries, Infosys, and Axis Bank are being seen as extremely important for markets to gauge the extent of the slowdown in earnings growth that has led to a correction in the market recently. There is a worry that corporate earnings in Oct-Dec will be below expectations, which will lead to downgrades in estimates for the next financial year as well.

Brokerage Nomura said the Nifty 50 consensus earnings estimates for 2025-26 (Apr-Mar) and FY27 may come down by 3-6% as the corporate earnings are unlikely to grow ahead of the GDP growth. "... weak demand and global uncertainty present headwinds to a material revival in corporate capex in the near term," the brokerage said in a report. Nomura expects muted gains this year and has set the Nifty 50 Dec-end target at 23784 points, indicating an upside of only 2.4% from the current level. On Wednesday, the Nifty 50 closed at 23213.20 points. 

"If there is a big disappointment from the (Oct-Dec) earnings, we can see a maximum fall to 22000 points (in Nifty 50)," Shrikant Chouhan, head of equity research at Kotak Securities, said. However, he said investors may refrain from taking a clear stand on markets ahead of US President-elect Donald Trump's inauguration on Jan. 20 and clarity over his policies.

Technical analysts expect a range-bound movement for the Nifty 50 on Thursday with a positive bias as markets have touched new lows recently, which might be seen as a buying opportunity by some investors. Going ahead, the Nifty 50 is likely to face resistance at 23300-23400 points and find support at 23000 points.  

Among major earnings, Reliance Industries is expected to report a year-on-year rise in consolidated net profit for the December quarter after declining for three successive quarters. The conglomerate's consolidated net profit may rise 3% on year to INR 178.30 billion, according to an average of estimates from brokerages. Axis Bank is likely to report a 6% rise in its net profit to INR 64.41 billion during the quarter.  End

Edited by Saji George Titus

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