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Informist, Friday, Feb. 21, 2025

By Akshita Kumar

MUMBAI – Analysts expect benchmark indices to fall more next week due to risks related to US President Donald Trump's tariff policies, fears of a prolonged period of weak earnings and expensive valuations. Amid concerns about domestic growth, investors will also closely watch the GDP data for Oct-Dec, which will be released on Feb. 28.

According to an Informist poll, India's GDP growth is seen rising to 6.4% in Oct-Dec from a seven-quarter low of 5.4% in Jul-Sept. Analysts mostly acknowledge that the Indian economy is going through a slowdown, and may take a few quarters to recover. The brokerage Nomura, which expects a GDP growth of 5.8% in Oct-Dec, said though the demand has improved during the quarter, it is still tepid.

Nomura said there is a possibility of high inflation in the US, in case Trump implements his threats on tariffs. A higher inflation in the US is likely to keep US bond yields high, which in turn, will make investments in developing markets such as India unattractive for foreign investors.

Continuous selling by foreign institutional investors is taking the market down, Vinit Bolinjkar, head of research at Ventura Securities, said. With interest rates rising globally, money from equity markets in emerging countries is flowing out, he said. Bolinjar expects the selling to continue till the end of March and the sentiment to improve only after April. For a month, Bolinjkar expects support for the 50-stock index at 22200-22000 and the resistance at 23300 points.

Friday, the Nifty 50 closed at 22795.90 points, down 117.25 points or 0.5%. The BSE Sensex closed at 75311.06 points, down 424.90 points or 0.6%. The resistance for the 50 stock index is seen at 23000-23100 and the support is seen at 22700-22650 points for Monday, Osho Krishan, senior research analyst at Angel One said. If the Nifty 50 breaches first support, then it may fall to 22400 points in the near term, Krishan said.

Analysts are positive on the metal sector in the near term as the December quarter earnings were not as bad as feared. Earnings were strong and resilient despite challenges, and even met consensus expectations and surpassed on some occasions owing to better volumes, an analyst tracking the metal sector, said. Friday, the Nifty Metal index gained for the fifth straight session and ended at its highest level in a month at 8609.7 points.

Shares of metal companies have risen amid hopes of a safeguard from the government with some media reports saying an import duty of 15-25% on steel imports could come in six months. "The incremental import duty, if implemented could be a significant positive for the industry aiding steel prices, which in turn, will increase margins. The US imposing 25% tariffs on steel imports could also lead to countries like South Korea and Japan diverting their exports to India, further strengthening the case for import duty (hike)," JM Financial said in a research report.

Among specific stocks, shares of Lupin will be in focus on Monday after the company said it received an establishment inspection report from the US Food and Drug Administration for the company's manufacturing facility in Somerset, New Jersey.   End

Edited by Saji George Titus

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