India Stocks Outlook
To track global cues; volatility likely amid trade war
This story was originally published at 19:53 IST on 11 April 2025
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By Gopika Balasubramanium
MUMBAI – Analysts said it is difficult to assess the market direction next week amid uncertainty over the trade war between China and the US. They, however, said markets will fall in the near term if the trade war escalates. Equity markets are shut on Monday on account of Ambedkar Jayanti.
Friday, the Indian market rejoiced at the 90-day pause on reciprocal tariffs. However, there is still risks to global growth due to the trade war, analysts said. "...the 90-day pause has reduced but not averted the economic hit," Nomura said in a note.
In a latest update on the trade war, US President Donald Trump increased tariffs on Chinese goods to 145%, and China retaliated again and raised its tariffs against US goods to 125%. This led to panic across markets, turning most Asian and European indices red Friday. Investors are worried the trade war would upend the global supply chain, slow down demand, and lead to a fall in crude oil and commodity prices.
Meanwhile, the European Union announced it would put its retaliatory tariffs against the US on hold after the US decided to pause the implementation of reciprocal tariffs. Back home, the Indian government is in negotiations for trade deals with the US, the UK, and the EU, media reports suggested.
"I'd argue, we have an opportunity today...if we can focus on these three big (free trade agreement) negotiations with the US, the European Union and the UK, if these work out for us this year, we'd be in a different situation." S. Jaishankar, external affairs minister, said at Carnegie India's annual Global Technology Summit, as quoted by The Hindu. Analysts have said that the Indian market firmly believes that the Indian government is well-placed to strike a free trade agreement with the US and other allies to tread in the path of increased uncertainty.
On Friday, the Nifty 50 closed at 22828.55 points, up 1.9% and the BSE Sensex closed at 75157.26 points, up 1.8%. All the sectoral indices closed sharply higher and mid- and small- cap indices also gained. This week, the Nifty 50 and the BSE Sensex fell 0.3% each.
"Today's (Friday) gains in the market will likely get erased and there is more room for correction if any tariff-related shocks in the coming week," said Pankaj Karde, executive vice-president at BOB Capital Markets. He said that there is an increased volatility in the market, and the Nifty 50 should stabilise between 22000 and 23000 points to gain further. "Nifty (50 index) should go through some time-wise correction, for it to stabilise," Karde said. "Domestic factors will likely be looked past by investors," he said, and added that with the beginning of earnings season, there could be some stock actions if there are any surprise.
The March quarter earnings began Thursday with Tata Consultancy Services reporting a muted net profit and sales growth. Investors will continue to look at companies' performamce in this quarter, but analysts suggest the market has already factored in the weak earnings growth in this quarter. "We pivot on our market view and now expect a strong India equities rally with earnings bottoming out, moderate valuations, and global uncertainty substantially reduced", said Emkay Global Financial Services.
"It is very likely that the domestic market may take cues from international markets as there are three more days left for the next trading day," said Ajit Mishra, senior vice president of technical, fundamental, and commodity research, at Religare Broking. He said Indian equities may not fall sharply on tariff-related shocks but could erase recent gains. He expects volatility to continue in the market. He expects the Nifty 50 to face resistance at 22300-21700 points and face resistance at 23400-23800 points. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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