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Informist, Tuesday, Feb. 4, 2025

MUMBAI – The benchmark indices are expected to open flat or slightly lower Wednesday but recover during the session, analysts said. However, the gains are likely to be capped as investors keep an eye on the Reserve Bank of India's monetary policy decision Friday, with the central bank widely expected to cut key interest rates. With China Tuesday announcing retaliatory measures against the tariffs imposed by the US, investors will also monitor geopolitical events across the world.

The Nifty 50 may open 60-70 points lower Wednesday but will recover during the session, Jigar Patel, senior manager, equity research, at Anand Rathi Shares & Stock Brokers said. On Tuesday, the Nifty 50 rose intraday above the high seen on the day of the Union Budget, which indicates positive momentum, he said. The index also closed above the 50-day moving average of 23662 points, which shows that the sentiment is bullish, Patel said. He believes the Nifty 50 may dip below 23600 points intraday Wednesday, but will bounce back and end in the green. He said the index will face resistance at 24000 points.

The Nifty 50 ended at 23739.25 points, up 378.20 points or 1.6%, and the BSE Sensex closed at 78583.81 points, up 1397.07 points or 1.8%. Both indices had fallen almost 0.5% Monday. Broader market indices also recovered Tuesday, with the Nifty Smallcap and Nifty Midcap indices ending 1-2% higher.

Others expect the Nifty 50 to open higher and rise further. "Currently, the foreign institutional investors in index futures are heavily short, with only 10% long positions," Brijesh Ail, head of technical and derivatives analysis at IDBI Capital Markets & Securities said. "I believe we are likely to see a trend shift today, and from this point, we should start moving higher." The analyst pegged the resistance for the index at 24200 points and the support at 23400 points.

Investor sentiment will be boosted by the fact that foreign investors were net buyers in the domestic market for the first time in over a month, while domestic investors were net sellers. Widespread sell-off by foreign investors was a major reason for benchmark indices correcting sharply the previous month.

Wednesday will be a relatively light day on the corporate earnings front, with no Nifty 50 company scheduled to announce its December quarter results. Info Edge (India) and Zydus Lifesciences will report their earnings. Info Edge is expected to report a net profit of INR 2.55 billion, up almost 20% on year. Zydus Life's consolidated net profit for the December quarter is seen rising 17% on year to INR 9.2 billion. Solar Industries India, Page Industries, and Cummins India will also report their earnings Wednesday.

Investors will react to Titan Co.'s earnings, which were revealed after market hours Tuesday. The company reported a net profit of INR 9.90 billion for the December quarter, missing analysts' estimates of INR 10.77 billion. Tata Power and Torrent Power also reported their earnings for the quarter after market hours.  End

Edited by Rajeev Pai

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