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Informist, Wednesday, Apr. 16, 2025

By Gopika Balasubramanium

MUMBAI – Headline indices are likely to open flat but may rise slightly Thursday ahead of the weekly expiry of derivative contracts, analysts said. On Wednesday, the Nifty 50 faced high selling pressure at 23250–23300 points but managed to break those levels and closed higher, analysts said. Investors may focus on March quarter earnings and also on management commentary to form a view on how corporate earnings will fare in the current financial year.

Expiry for the weekly Nifty 50 derivatives is expected to be between 23300 and 23500 points, a research analyst at Axis Securities said. "Indices are likely to stay subdued, and I do not expect any major volatility tomorrow (Thursday)," the analyst further said. The market looks strong and the Nifty 50 will likely move towards 23800 points, the analyst said, adding that he expects the index to find support at 23100 points and face resistance at 23800 points.

The Nifty 50 Wednesday closed at 23437.20 points, up 0.5%, and the Sensex closed at 77044.29 points, up 0.4%. Broader market indices outperformed the benchmark indices, with mid- and small-cap indices closing over 0.52-1.03% higher.

Short covering by investors is unlikely Thursday until the Nifty 50 breaches 26000 points, said Ajit Nayak, technical analyst at HDFC Securities. Post this level, there would be short-covering rallies that could see the Nifty 50 breach 24000 points, he said. Nayak expects the 50-stock index to find support at 22900 points and face resistance at 23600 points Thursday.

Analysts said that in the coming trading sessions volatility may continue as the trade war between the US and China continues to affect sentiment. The US has now levied a 245% tariff on Chinese imports. Even though there could be sharp movements due to tariff-related shocks, investors would focus on the effects of tariffs on Indian companies and the Indian economy, analysts further said.

According to them, even though India is not an export-driven economy, the impact of a slowdown caused by trade wars across the globe, lower demand, currency wars, and supply chain disruptions cannot be overlooked. Recession worries have partly been allayed as US President Donald Trump has announced a 90-day pause on the tariffs levied on the country's trading partners. Apart from this, market players also fear China may dump its products in India, which would erode sales of Indian companies, especially metals companies, analysts said.

Metals will be the worst hit in the back-and-forth between the US and China, according to Tushar Chaudhari, research analyst at Prabhudas Lilladher. The demand for steel will see a slowdown if the trade wars escalate, affecting the Indian steel-makers adversely, he said. If the Chinese economy slows down, its demand for metal-related products may fall, which will lead to a fall in global commodity prices. This will likely put downward pressure on the prices of steel sold by Indian steel companies, Chaudhari added.   

On the earnings front, shares of Wipro will likely see selling pressure due to a lower guidance for the June quarter. The company reported a consolidated net profit of INR 35.70 billion for the March quarter on a consolidated revenue of INR 225.04 billion, after-market hours Wednesday. The company said it expects its IT services sales to decline by 1.5%-3.5% in constant currency for the June quarter, which will dent investor sentiment. On Thursday, four Nifty 50 constituents--Infosys, Adani Ports and Special Economic Zone, HDFC Life Insurance Co., and Jio Financial Services--will report their March quarter earnings. Infosys is expected to report a 3.7% on-quarter growth in its bottom line on a flat revenue in the March quarter. End

Edited by Nishant Maher

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