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Informist, Friday, Mar. 7, 2025

By Akshita Kumar

MUMBAI – Benchmark indices are expected to rise next week following a fall in the dollar index and the oversold conditions of the domestic market. But, analysts warn that any major negative news on tariffs may weigh the market down. While there are chances of a rally next week, many analysts are unsure about whether the gains will be sustained.

"The key challenge for our market is the uncertainty surrounding tariffs by Donald Trump," Santosh Meena, head of research at Swastika Investmart, said. "Most of the negativity of tariffs is factored in and our market may not react to it later," Meena said. He said that any softness reading tariffs will be positive for the domestic market. If tariffs are not as bad as expected, then there may be some positive sentiment in the market, Meena said.

High tariffs will lead to inflation in the US and may cause a slowdown in the US economy, Meena said. This may lead to investors taking their money out of US and invest in emerging markets such as India, he said. When asked about valuations, Meena said those of large-cap stocks are at comfortable levels, but those of mid-caps are still expensive.

The Reserve Bank of India's latest move to boost liquidity in the banking system is a big positive as it may lead to better loan growth for banks, Meena said. He expects Nifty 50 companies to post profit growth in low double digits in the first quarter of the next financial year on the back of the RBI's liquidity boosting measures and the government's revision in income tax slab, which may boost discretionary spending.

On Friday, the Nifty 50 ended around 8 points higher at 22552.50 points, its highest level in a week. The 50-stock index snapped a three-week losing streak. The BSE Sensex ended at 74332.58 points, down 7.51 points. The resistance for the 50-stock index is seen at 23000-23200 points and the support is pegged at 22400 points for the next week, Brijesh Ail, head of technical and derivatives at IDBI Capital Markets & Securities, said. Ail said the recovery of the Nifty 50 this week is a good sign for next week's momentum.

The India VIX, a key indicator of market volatility, declined almost 2% to close at 13.47 Friday. This fall reflects reduced uncertainty in the market, Mandar Bhojane, technical and derivatives analyst at Choice Broking, said. Meanwhile, the Nifty mid-cap indices ended down 0.2-0.4% on Friday while the small-cap indices ended up 0.1-0.7%. Ail of IDBI Capital Markets expects the Nifty Midcap 100 index to rise to 51000 points next week and Nifty Smallcap 250 index to go to 15500-16000 points next week. Friday, Nifty Midcap 100 index ended at 49190.60 points and the Nifty Smallcap 250 index ended at 14602.95 points.

Ail believes that if the Nifty Bank index falls below 48000 points, then the downtrend in the market will resume. Ail expects the Nifty Oil & Gas index to rise 200 points more next week. Friday, the Nifty Oil & Gas index ended up 0.6% and was among the top performing sectoral indices. He believes the Nifty IT may fall further due to its weak structure on the technical charts. Nifty IT index ended down nearly 1% Friday, with most of its constituents in the red.

Among specific stocks, Alembic Pharmaceuticals will be in focus Monday. Post market hours Friday, the company said the US Food and Drug Administration issued Form 483 with one procedural observation to the company's bioequivalence facility in Vadodara, Gujarat.  End

Edited by Ashish Shirke

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