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Informist, Thursday, Apr. 17, 2025

By Gopika Balasubramanium

MUMBAI – The benchmark indices closed sharply higher Thursday, rising for the fourth straight session. They were in the red for around three hours at the start of trade, but recovered sharply thereafter. The Nifty 50 index rose to a three-month high of 23872.35 points on the weekly expiry day of Nifty 50 options. Sharp gains were seen in the indices as traders covered their short positions, analysts said. Indian equities outperformed global indices even after comments from US Federal Reserve Chair Jerome Powell hinted that President Donald Trump's tariffs could increase the risk of higher inflation and a slowdown in the US economy.

"For the time being, we are well positioned to wait for greater clarity before considering any adjustments to our policy stance," Reuters reported Powell as saying. Powell spoke at the Economic Club of Chicago. It was the first time he had addressed the public amid the shift in US trade policies.

Foreign portfolio investors were active in the cash market Thursday, analysts said, and are likely to have bought banking stocks ahead of the March quarter earnings announcements. Worries about tight liquidity and higher interest rates have eased and earnings this financial year are likely to be better, they said. The Reserve Bank of India has infused INR 8.2 trillion of liquidity into the banking system between December and April and this is expected to have lowered the overall cost of borrowing for banks. The RBI has also cut benchmark interest rates twice--in February and April--but these will lower banks' earnings and the impact will play out fully only in the first quarter of the new financial year that started Apr. 1.

Thursday, the Nifty 50 closed at 23851.65 points, up 414.45 points or 1.8%. The BSE Sensex ended at 78553.20 points, up 1508.91 points or 2%. Nifty mid- and small-cap indices fell behind the benchmark indices. The mid- and small- cap indices closed 0.3-1.1% higher. Sharp gains in financial services and oil and gas stocks lifted the benchmark indices higher. On the other hand, information technology stocks were the biggest drag on the index, but most of them, except for Wipro and Tech Mahindra, recovered towards the end of the session, and closed slightly higher.

In the Nifty 50, Eternal, ICICI Bank, and Bharti Airtel were the top gainers and closed 3.7-4.3% higher. Shares of ICICI Bank closed sharply higher ahead of its March quarter earnings Saturday. The lender is expected to report a rise of over 10% in net profit and its net interest income is expected to rise by over 9%, according to an average of estimates from 16 brokerages. 

Wipro was the worst hit in the 50-stock index and closed 4.3% lower. The stock had fallen 6.3% to an intraday low of INR 232.15. Shares of Wipro fell as the company's guidance for the June quarter was weak and sentiment was further dampened by Powell's comments about a potential slowdown in the US economy. The company said it expects sales from IT services to decline by 1.5-3.5% in the June quarter.

After the earnings announcement, Nuvama Institutional Equities downgraded the stock to 'hold' and cut the target price by 13% to INR 260. The brokerage also warned against the client delaying spending amid increased macroeconomic uncertainty and said there is a high likelihood of Wipro reporting an on-year decline in top line for the financial year 2025-26 (Apr-Mar). "Cancellations from clients in the US may have started amid fears of a slowdown in the US economy. However, the real impact will likely be seen in the June quarter," a senior research analyst at a mid-sized brokerage said.

Hero MotoCorp closed only slightly lower, erasing almost almost all the losses it had chalked up after the company halted production at four manufacturing units. Analysts said the company's annual production may take a minor hit due to this. "If you assume 60% utilisation of these plants in the current financial year, there may be a 0.7% loss in production," a research analyst at a domestic brokerage said. "How much of a ramp-up is possible in May is still not known, but this indicates that inventory is piling up amid low demand," the analyst said. Hero MotoCorp had said it would temporarily pause production at four manufacturing plants in Dharuhera, Gurugram, Haridwar, and Neemrana from Thursday to Saturday for maintenance.

On the sectoral front, the Nifty Financial Services and Nifty Private Bank were the top gainers and ended up 2.3% and 2.2%, respectively. Others such as the Nifty Infrastructure, Nifty PSU Bank, and Nifty Oil & Gas also gained and closed 1.2-1.8% higher. The Nifty IT was in the red for the major part of the day, but recovered and closed 0.2% higher.

Among Nifty 200 stocks, ABB India closed 3.6% higher. The company's Switzerland-based parent company, ABB, had reported better-than-expected earnings for Jan-Mar. On the other hand, One97 Communications closed 1.8% lower and was among the worst performers in the 200-stock index. The company's managing director Vijay Shekhar Sharma Wednesday said he would voluntarily forgo 21 million employee stock ownership plan units with immediate effect.

Fertilizers & Chemicals Travancore closed nearly 14% higher and was the biggest gainer in the Nifty 500 index, while Sonata Software closed 6.1% lower and was the worst-hit. Shares of Sonata Software fell after the company said revenue from its largest client is likely to be lower than expected amid the ongoing trade war caused by recently imposed US tariffs. As a result, its revenue from international business may decline and miss the company's guidance. 

* Of the Nifty 50 stocks, 44 rose and 6 fell

* Of the Sensex stocks, 28 rose and two fell

* On the NSE, 1,847 stocks rose, 1,047 fell, and 83 were unchanged

* On the BSE, 2,427 stocks rose, 1,522 fell, and 157 were unchanged

* Nifty Financial Services: up 2.3%; Nifty Private Bank: up 2.2%; Nifty IT: up 0.2%

BSE                                               NSE

Sensex: 78553.20, up 1508.91 points or 2%         Nifty 50: 23851.65, up 414.45 points or 1.8%

End

US$1 = INR 85.36

Edited by Rajeev Pai

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