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Informist, Tuesday, Mar. 18, 2025

By Gopika Balasubramanium

MUMBAI – Domestic benchmark indices are likely to rise Wednesday due to positive sentiment in the market amid positive macroeconomic data, nearly no tariff-related surprises from the US so far this week, and attractive valuations, analysts said. Valuations have reached levels that are attractive for foreign investors to re-enter the market, analysts said.

The turnaround of foreign investors to becoming net buyers may happen in Apr-Jun, Narendra Solanki, head of fundamental research at Anand Rathi Share & Stock Brokers, said. Large-cap stocks are at attractive valuations and one should opt for a stock-specific approach in the mid- and small-cap spaces, he said.

Investors will also await the outcome of the monetary policy meetings of the Bank of Japan and the US Federal Reserve due Wednesday. The Bank of Japan is seen holding rates steady as it already made a move at the last policy meeting and also because the economy faces significant uncertainty related to tariffs, The Japan Times reported. "There is no urgency to act following the 25-basis-point hike to 0.50% at the previous meeting in January," the report quoted Masamichi Adachi, an economist at UBS Securities, as saying. 

Investors will also watch for the comments of US Federal Reserve Chairperson Jerome Powell on the US economic projections and also about the future rate cuts. According to the latest CME FedWatch tool, there is a 99% probability that the US Fed will leave the rates unchanged for the second time Wednesday. The Fed had cut interest rates in the previous three consecutive meetings since September and currently the rate is at 4.25-4.50%.

"The market is showing very strong recovery and this is likely to sustain through the week," Brijesh Ail, head of technical and derivatives research at IDBI Capital Markets & Securities, said. The Nifty Bank is also showing strength and the near-term outlook looks good if it does not breach 49000 points, he said. Ail also said that the automobile, metal, and healthcare stocks have performed well in the last three days and this trend is likely to continue. He expects the Nifty 50 to find support at 22500 points and face resistance at 23000 points.

The Nifty 50 closed Tuesday at 22834.30 points, up 1.5%, with only four stocks closing lower. The 50-stock index closed above 22800 points for the first time in three weeks. The BSE Sensex closed at 75301.26 points, up 1.5%. In comparison, the broader markets performed better, with most of them closing over 2%. All sectoral indices also closed higher, with Nifty Media and Nifty Realty ending over 3% each.  End

US$1 = INR 86.57

Edited by Tanima Banerjee

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