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Informist, Friday, Apr. 25, 2025

MUMBAI – Analysts were divided over what direction the market will take next week amid uncertainty over diplomatic ties with Pakistan and chances that profit sales will continue, analysts said. Indices may rise again next week after two days of fall as the outlook for the near term is still positive, they said. However, some analysts expect indices to fall some more to correct the sharp seven-session rally a bit more.

Just as the US tariffs were paused, investors were hit with uncertainty closer home with relations between India and Pakistan deteriorating quickly after terrorists killed 26 tourists at Pahalgam in Jammu and Kashmir. India blames Pakistan for supporting terrorists and has suspended the Indus Waters Treaty which governs the use of waters of the rivers that are common to the two countries and also cancelled visas issued to Pakistani citizens. In retaliation, Pakistan has denied the use of airspace to Indian carriers, closed some border crossings, and suspended trade agreements with India.

Indices may rise again after falling a bit as there may be buying interest at the lower levels, Kshitija Salvi, technical analyst at IDBI Capital Markets & Securities said. "Technically, the weekly charts indicate a swing reversal, and corrections within the range of 23800 – 23500 should be considered for adding long positions," Salvi said. "The near-term trend remains bullish, with 25500 levels appearing promising." For Monday, indices are likely to consolidate after a session of sharp fall, she said.

On Friday, The Nifty 50 ended at 24039.35 points, down 207.35 points, or 0.9%, and the BSE Sensex closed at 79212.53 points, down 588.90 points, or 0.7%. Indices fell as investors turned jittery, fearing an escalation in the conflict between India and Pakistan. Analysts pegged the support for the 50-stock index at 23800-23500 and resistance at 24100-24200.

However, Anmol Athawale, vice-president of technical research at Kotak Securities, expects benchmark indices to fall more. "We believe that as long as the market is trading below 24100/79300, the correction wave is likely to continue. On the downside, the market could slip to 23800/78500, and further downside may drag the index down to 23700/78200," Athawale said in a note.

Over the next week, political and diplomatic developments between India and Pakistan will be an important factor in dictating investor sentiment. "India is already in a state of war with Pakistan after it revoked (suspended) the Indus Water Treaty. Pakistan also retaliated by suspending all trade," Vinit Bolinjkar, head of research at Ventura Securities, said. "An appropriate response from India to the terror strikes is inevitable...we don't know the timing and magnitude of the response. This concern and uncertainty will get reflected in the market," V.K. Vijayakumar, chief investment strategist at Geojit Financial Services, said.

On the earnings front, IDFC First Bank and Indraprastha Gas will report their March quarter earnings on Saturday and Sunday, respectively. Among the Nifty 50 companies, UltraTech Cement is set to report its earnings Monday. The company is expected to report a consolidated net profit of INR 25.51 billion in the March quarter, up 13% on year. Its top line is seen rising 11% to INR 226.70 billion. While the cement maker's profitability is seen rising due to a decline in operating costs, some analysts expect higher depreciation, and a rise in interest costs, to restrict the growth in the bottom line.

Adani Green Energy, TVS Motor Co., and Indian Railway Finance Corp. are among the companies in the Nifty 100 which will release their quarterly results Monday. TVS Motor is expected to report a 52% on-year rise in its net profit to INR 7.4 billion for the March quarter. The rise in the company's bottom line is likely driven by volume growth, better mix of models, and price hikes. There weren't enough analysts' estimates on Adani Green and Indian Railway Finance Corp.  End

Edited by Deepshikha Bhardwaj

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