More Stories

Informist, Wednesday, Feb. 19, 2025

By Anjana Therese Antony

MUMBAI – The minutes of the US Federal Reserve's latest monetary policy meeting due early Thursday and news flow on US trade policies, if any, are expected to provide cues for Indian equity investors in the absence of major domestic triggers. Later this week, market watchers will wait for the Reserve Bank of India's monetary policy minutes. With the December quarter earnings season ending soon and almost all key economic data already out, updates on US policies will be the primary focus of investors in the days to come, analysts said. Some of them also said they do not see the bear run in the Indian market ending as long as the uncertainty around US tariffs persists. 

Trump's latest announcement of possible 25% tariff on automobile, pharmaceutical, and semiconductor imports are adding to investors' woes. India's tariffs are higher than those of the US on most products, with the differential being the highest in agricultural products, textiles, and pharmaceutical products, Goldman Sachs said in a report Tuesday. The country's bilateral goods trade surplus with the US has doubled over the last 10 years to $35 billion, which is about 1% of India's GDP, the broking firm said.

Foreign investors currently hold more than 80% short positions in index futures amid their bearish approach to the Indian stock market. Two derivatives analysts said the weekly expiry of Nifty 50 options contracts may lead to some final-hour volatility Thursday. Both analysts do not expect the 50-stock index to close above 23100 points. The Nifty 50 ended 12.40 points lower at 22932.90 points, and the BSE Sensex closed 28.21 points lower at 75939.18 points. The 22800 level remains a key support for the 50-stock index and resistance is pegged at 23000-23100 points. Both benchmark indices have fallen over 11% each since October when foreign investors started to sell their holdings aggressively.

There are also concerns about a possible rise in US inflation in the coming months. Recently, US CPI was surprisingly higher than expected. If inflation rises, analysts fear that the Fed may not cut rates further. The Fed's minutes are expected to give some hint on the central bank's interest rate trajectory. Fed Chair Jerome Powell recently said the Fed is in no hurry to reduce rates, though he declined to comment on the impact of President Donald Trump's tariffs and policies.

Investors are shifting their focus to blue-chip stocks and taking profits out from mid- and small-caps because of expensive valuations and a hazy outlook on the market. "After showing remarkable resilience in the past one year during market volatility, smallcap and midcap segment is witnessing profit booking and has significantly underperformed largecaps since September 2024 highs," ICICI Direct Research said in its note Wednesday.  End

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.