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Informist, Thursday, Mar. 20, 2025

By Gopika Balasubramanium

MUMBAI – Analysts were divided on the direction of benchmark indices Friday. Some analysts see the key indices moving in a range after opening lower, while some said the benchmark indices may open higher but fail to hold on to the gains. The US Federal Reserve retaining its view on cutting interest rates twice in 2025 may keep the market sentiment upbeat, analysts said.

The market has bottomed out and the valuations of large-cap stocks are fair, some analysts believe. There has been a major sell-off of Indian equities since September on concerns over expensive valuations, a slowdown in corporate earnings growth, and lower-than-expected spending by the government.

"The market has bottomed out and the worst is behind us", Chokkalingam G., founder of Equinomics Research, said. The rally is likely to continue for the rest of March and will likely spill over to April as the market has already discounted the risks associated with US tariffs, he said. India is unlikely to bear the brunt of US President Donald Trump's tariff wars as the US' trade deficit with the country is much lower than with its key trade partners, he said. The US' trade deficit with India was $45.7 billion in 2024, data from the US States Trade Representative website showed. 

Thursday, the Nifty 50 closed 1.2% higher at 23190.65 points with only four stocks closing lower. Gains in index heavyweights HDFC Bank, Bharti Airtel, Reliance Industries, and Infosys lifted the index. The BSE Sensex closed 1.2% higher at 76348.06 points.
 

"It is visible that the market has bottomed out with the way there has been supportive buying from the lower levels," an analyst at Axis Securities said. Currently, all the sectors are equally contributing to this phase of market recovery, the analyst said. Going forward, it will be important to understand how sector re-rotation happens and then what happens in the next leg of the ongoing rally, the analyst said. When asked about Friday's session, the analyst said there is only a 50% chance of the market opening higher, as the recent rally looks stretched. Some cool-off is expected in the market on Friday, even though there may be a gap-up opening, the analyst said. He expects the 50-stock index to find support at 22800-22650 points and face resistance at 23250-23600.

On the other hand, Ashish Sherigar, technical analyst at NVS Brokerage, expects the indices to open sideways or 50-70 points lower. However, he also said that a gap-up opening is possible if global cues are positive. Considering the current scenario in the market, investors' approach has transitioned from "sell on rise" to a "buy on dip" strategy, reflecting a shift in sentiment, he said. A potential profit-booking session can be anticipated in the near term at around 22900 points owing to the recent sharp rally, he said. He expects the Nifty 50 to find support at 23050-22900 points and face resistance at 23430-23630 points.

Investors will likely take cues from Accenture's earnings and its revision to revenue guidance, which came after market hours Thursday. The US tech giant's earnings are likely to act as a key trigger for domestic information technology stocks as it could throw light on the current condition of tech spending in the US. Accenture revised its revenue guidance for 2025 to a growth of 5-7% from 4-7% growth expected earlier. Most IT stocks ended higher on Thursday, pushing the Nifty IT index up over 1%.

Investors will now focus on further economic data from the US, namely the report on the weekly unemployment insurance claims for the week ending Mar. 15, due late Thursday. This is a key monitor as there are some concerns about a slowdown in the US economy.  End

US$1 = INR 86.37

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Vandana Hingorani

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