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Informist, Friday, Feb. 28, 2025

By Akshita Kumar

MUMBAI – The benchmark indices are likely to fall next week as GDP growth for the December quarter was slightly below expectations and uncertainty around tariffs by the US persists. Automobile stocks will be in focus as the companies are likely to report their February sales figures on the weekend.

After market hours Friday, India's GDP growth for the December quarter came in at 6.2%, up from 5.6% during the September quarter on better performance by the manufacturing and agriculture sectors. However, the GDP growth number was slightly lower than the consensus estimate of 6.3% in an Informist poll.

"While the worst is over for India's economic growth, global uncertainties and volatile energy prices remain key risks... India remains the fastest-growing major economy, but the growth falls short of expectations," Manoranjan Sharma, chief economist at Infomerics Ratings, said in a note. Madhavi Arora, chief economist at Emkay Global Financial Services, said, "...the implied 4QFY25 (Jan-Mar) GDP estimate appears to be a high 7.7%, a tall ask given the current macro dynamics."

Major automobile companies will release their February sales figures Saturday. Two-wheeler sales are seen flat during the month, according to a research report from Nirmal Bang Institutional Equities. The brokerage expects Bajaj Auto to report total two-wheeler sales volume at 325,000 units in February, up nearly 10.3% on year, but down 1% on month. Hero MotoCorp is expected to be the weakest in the pack with total two-wheeler sales volume at 425,000 units, down 9.3% on year, impacted by a slower uptick in the entry segment.

The brokerage expects high-single-digit growth in the financial year 2024-25 (Apr-Mar) in the tractor segment on positive sentiment in rural areas, better terms of trade for farmers, and government support programmes.

Friday, the Nifty 50 ended at 22124.70 points, down 420.35 points or 1.9%, and the BSE Sensex ended at 73198.10 points, down 1414.33 points or 1.9%. The 50-stock index has ended higher in just two of the 20 trading sessions in February. The key support for the Nifty 50 next week is seen at 22000 points, Ajit Mishra, senior vice-president at Religare Broking, said. If the index breaches that level, the next support will be at 21,800 points. The resistance for the 50-stock index is seen at 22500-22750 points.

A slowdown in the economy, global uncertainty regarding US President Donald Trump's tariff plans, and continuing foreign investor outflows are dampening market sentiment, Anita Gandhi, head of institutional business at Arihant Capital Markets Ltd, said. About foreign institutional investor outflows, Gandhi said they are booking profits in India as the domestic market continues to be expensive when compared with other emerging markets.  End

Edited by Rajeev Pai

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