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Informist, Tuesday, May 20, 2025

By Akash Mandal

MUMBAI – Benchmark indices are likely to move in a narrow range Wednesday after a sharp decline in Tuesday's session. Despite the fall, analysts expect the market to rise in the near term as the sentiment remains positive. However, foreign investor flows should be tracked for cues related to the underlying mood of foreign investors, analysts said. Corporate earnings will also remain in focus in a market where traders are looking at specific stocks with robust fundamentals instead of an entire sector, they said.

The market is likely to consolidate for the next 1-2 sessions before rising again, Ajit Mishra, senior vice-president of research at Religare Broking, said. "The market is sceptical about the overall scheme of things...US-China trade deal is obviously positive for global markets, especially for China...now it has cut rates. This might tempt FIIs to other emerging markets," Mishra said. However, he said it is too soon to say if investors will exit the Indian market for other opportunities, and believes that these events will have a limited impact on the domestic market. Foreign investors have net sold Indian equities in three of the last seven sessions after heavily buying for 16 straight sessions prior to that. 

Aditya Gaggar, director at Progressive Shares, also believes that the underlying trend is positive despite a dip in the short term. "Currently, the index (Nifty 50) is positioned at its trendline support, with a potential hidden bullish divergence...market activity in the upcoming session will be crucial in determining whether the trend continues or reverses," Gaggar said in a note.

The Nifty 50 fell 261.55 points, or 1.1%, to close at 24683.90 points. Heavyweights such as HDFC Bank, ICICI Bank, and Larsen & Toubro were the biggest drag on the index. The BSE Sensex closed at 81186.44 points, down 872.98 points, or 1.1%. Both indices moved in a thin range initially but fell sharply in the latter half of the session.

On the earnings front, two Nifty 50 constituents are scheduled to report their March quarter earnings Wednesday--IndusInd Bank and Oil and Natural Gas Corp. 

Brokerages are divided on the bottom line of IndusInd Bank due to the provisions it is expected to make to cover the accounting lapses in its derivatives portfolio. Seven brokerages expect the bank to report a net profit for the quarter, averaging to INR 1.65 billion, and as many as eleven brokerages expect the bank to post a net loss, with an average loss of INR 4.12 billion. ONGC's bottom line and top line are expected to decline 13% and 3%, respectively, due to a fall in output of crude oil and gas.

Interglobe Aviation, Power Finance Corp., Mankind Pharma, Rail Vikas Nigam, Astral, Oil India, and Colgate Palmolive (India) will also report their earnings for the March quarter Wednesday.  End

Edited by Deepshikha Bhardwaj

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