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Informist, Wednesday, Feb. 12, 2025

By Akash Mandal

MUMBAI – The benchmark indices may see some buying interest Thursday, but the gains will be capped, analysts said. Investors will react to India's better-than-expected inflation print for January. The country's headline inflation was at a five-month low of 4.31% for the month compared to an estimate of 4.5%. The lower-than-view inflation will boost hopes of another rate cut by the Reserve Bank of India's in its next policy meeting in April.

Investors will also keep an eye on the US CPI data for January, due later Wednesday. The data will be crucial after US Federal Reserve Chair Jerome Powell Tuesday said the central bank is not in a hurry to cut rates. "With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance," Powell said. The market will also look out for any announcements from Prime Minister Narendra Modi's two-day visit to the US, where he is scheduled to meet President Donald Trump.

The Nifty 50 ended at 23045.25 points Wednesday, down 26.55 points or 0.1%, and the BSE Sensex ended at 76171.08 points, down 122.52 points or 0.2%. Both indices had briefly turned positive after falling over 1% to their intraday lows earlier. The broader market indices also ended off their lows. The Nifty Smallcap and Nifty Midcap indices closed 0.2-0.7% lower.

Headline indices might see some upside Thursday after staging a strong recovery Wednesday, Kshitija Salvi, technical analyst at IDBI Capital Markets & Securities, said. However the gains will be capped as the Nifty 50 will have to breach 23800 points in order for the gains to be sustained. The depreciation of the rupee is a major concern now as it might lead to further foreign fund outflows, Salvi said. On Wednesday, the rupee depreciated 0.1% against the dollar to end at 86.89. The view for now is cautious even if there are temporary gains, Salvi said.

If the Nifty 50 sustains above 23130 points, further upside towards 23300 is likely, Ashish Sherigar, technical analyst at NVS Brokerage, said. "A decisive move above 23130 (points) could turn the sentiment bullish, whereas failure to hold 22750 may extend the downside move," Sherigar said. Sherigar pegged the immediate resistance for the index at 23130 and support at 22800 points.

London-based economic research firm Capital Economics said in a report that it does not expect the Indian stock market to perform well this year. The Indian market is likely to underperform the MSCI Emerging Markets Index for the rest of 2025 amid the risks of an economic slowdown, further outflows of foreign funds, and high valuations of mid- and small-cap stocks, the firm said in a report. While earnings growth of Indian companies in 2025 might be higher than in the pre-pandemic period, the consensus estimate of 16% growth in earnings for companies in the MSCI India Index in 2026 seems high, as per the report.

Hindalco Industries is the only Nifty 50 constituent left to declare its earnings for the December quarter. It will disclose the results Thursday. The company's revenue for the quarter is expected to grow over 51% on year to INR 35.3 billion. The stock ended 0.5% higher Wednesday, after falling almost 2% in the previous two sessions. SJVN will also detail its earnings for the quarter. The company's net profit is expected to rise over 9% to INR 5.37 billion. The stock has ended in the red in the past four sessions, declining over 7% in that period.  End

Edited by Rajeev Pai

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