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Informist, Wednesday, Mar. 12, 2025

By Akshita Kumar

MUMBAI – Analysts expect the benchmark indices to be in a range Thursday as the market is in a consolidation phase after a period of heavy correction. Investors may react positively to a better-than-expected inflation data for February. However, the gains may be limited due to the uncertainty surrounding the impact of US tariffs and policies, analysts said.

"The impact of tariffs is uncertain and the domestic market is in a very uncertain territory right now," V.K. Vijayakumar, chief investment strategist at Geojit Financial Services, said. On a monthly basis, the S&P 500 index is down over 8%, the Nifty 50 is down 2.5%, and Hong Kong's Hang Seng index is up 8%, Vijayakumar said. So foreign institutional investors are taking money out of US and investing it in emerging markets such as China, he said.

Before CPI data was released, Vijayakumar had said that if the CPI inflation comes below 4%, then there is a chance that the Reserve Bank of India may cut rates by 25 basis points at its next meeting, which may support the domestic market.

Data released post market hours showed India's headline CPI inflation fell to 3.61%, below the Reserve Bank of India's medium-term target of 4% for the first time in six months as vegetable prices continued to decline during the month. A poll by Informist had pegged the headline inflation at 3.9%.

On Wednesday, the Nifty 50 ended at 22470.50 points, down 27.40 points or 0.1% and the BSE Sensex ended at 74029.76 points, down 72.56 points or 0.1%. The near term support for the 50-stock index is seen at 22000-21800 points and resistance is at 22720 points, Vipin Kumar, assistant vice-president of technical and derivatives at Global Capital Market.

Nifty mid-cap indices ended down 0.5-0.7% and the small-cap indices ended down 0.2-0.3%. The support for Nifty Midcap 50 is seen at 13300-13090 points and for Nifty Smallcap 100 at 14300-14050 points, Kumar said. He expects the Nifty IT to test 35000 levels in the near term. The Nifty IT ended at 36310.65 points, down nearly 3%. Kumar expects financial services, pharmaceutical, metals, and oil and gas stocks to outperform in the near term.

On corporate earnings for the March quarter, Vijayakumar said he expects a slight improvement with information technology, automobile, pharmaceutical, and chemical sector posting better results. This will be driven by a slight pick-up in the economy, he said.

Adjusted earnings before interest, tax, depreciation, and amortisation losses are likely to increase in the near term in the quick commerce segments of Zomato and Swiggy due to accelerated store expansion amidst high competitive intensity and growing competition, JM Financial said in a research report. Further, food delivery industry's growth may slow down to around 16% in the March quarter from 18% in the December quarter, the brokerage said.

The US CPI data for February that will be released later in the day will give cues on the likely move of the US market. Among stocks, Bharat Electronics will be in focus Thursday, as the company has signed a contract valued at INR 24.63 billion with the defence ministry for supply and services of Ashwini radars.  End

Edited by Ashish Shirke

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