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Informist, Thursday, Feb. 27, 2025

By Akshita Kumar

MUMBAI – Headline indices are seen down Friday due to concerns over slowdown in earnings growth, fears over imposition of tariffs by Donald Trump-led US administration, and continuous outflows by foreign institutional investors. The focus will also be on India's GDP data for Oct-Dec, which will be released at 1600 IST.

According to a poll of 16 economists by Informist, GDP growth is expected to have risen to 6.3% in the final quarter of 2024, a sharp rebound from a seven-quarter low of 5.4% growth in Jul-Sept. Though GDP growth is expected to show improvement, it is likely to be significantly below the growth rate of 8.6% in the December quarter of 2023. This has raised concerns about economic growth slowing, which would impact returns going forward.

"Most of the domestic money is exhausted right now and the general perception of the market has become very negative," Pankaj Karde, head of institutional equities at Asit C. Mehta Investment Intermediates, said. Karde said market sentiment is likely to improve once interest rates come down in the coming quarters and income tax relief announced in the Union Budget helps improve demand, Karde said.

The market will stabilise when there is some clarity regarding Trump's policies as the uncertainty is hurting the market, Amish Shah, research analyst at Taurus Corporate Advisory Services, said. Shah expects corporate results to be better in the first half of next financial compared to Oct-Mar of 2024-25 (Apr-Mar).

December quarter results of BSE 500 companies show that the broader universe continues to struggle with weak revenue growth of 7% on year, Kotak Institutional Equities said in a research report. Banks, capital goods, capital markets, diversified financials, healthcare, real estate, retailing and telecommunication services reported decent-to-strong sales growth on a yearly basis, the brokerage said.

On Thursday, the Nifty 50 ended at its lowest level in eight months at 22545.05 points, down 2.5 points. The BSE Sensex closed at 74612.43 points, up 10.31 points. On the downside, 22500 points is expected to act as a key support level, and a fall below this level could push the Nifty 50 to 22300–22000 levels, Mandar Bhojane, technical and derivatives analyst at Choice Broking, said. On the upside, immediate resistance is seen at 22700 points, with a crucial hurdle near 22800 points, Bhojane said.

After the Reserve Bank of India's latest decision to reduce risk weights of bank loans to non-banking finance companies and for microfinance loans, mid-cap banks who have exposure to microfinance institutions could see a short-term rally, while NBFCs could see some easing in cost of funds, brokerage Anand Rathi Share and Stock Brokers said in a report. Overall, the brokerage said combination of liquidity infusion, rate cuts, and reduced risk weights signal a more favourable regulatory and business environment for lenders.

Among specific stocks, KSB Ltd. will be in focus on Friday. Post market hours, the company reported a consolidated net profit of INR 731 million for the December quarter on a revenue of INR 7.26 billion. Schaeffler India also reported its earnings, with net profit for Oct-Dec at INR 2.49 billion, largely in line with expectations of INR 2.50 billion.   End

Edited by Ashish Shirke

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