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Informist, Monday, Jun. 2, 2025

By Akash Mandal

MUMBAI – Benchmark indices are likely to keep consolidating with a positive bias Tuesday amid global geopolitical uncertainty and a lack of fresh domestic triggers. Investors will keep monitoring the conflict between Russia and Ukraine and the back-and-forth between China and the US on the tariff front. Investors also eye the Reserve Bank of India's monetary policy outcome due Friday.

The market has priced in a rate cut by the RBI, analysts said, though some believe there is still some room for upside. "A 25 bps (basis points) cut is already priced in... however, if the cut is 50 bps, then the market might react," an analyst at a domestic brokerage said.

Indices have been consolidating for the last couple of weeks amid a lack of triggers in the domestic market. The market ignored the better-than-expected GDP data for the March quarter on Monday as investors focused on uncertainties and conflict in parts of the world.

Meanwhile, BofA Global Research said it sees no further upside for the Nifty 50 in 2025. "We believe that ongoing monetary stimulus would help India revive its GDP/capex/consumption growth, but we expect a shallow revival and thus remain conservative on GDP growth at 6.3% vs 6.5%... given the recent rally, we see no upside to our Nifty year-end target of 25k," the global brokerage said in its strategy report on Wednesday. While the markets have fully priced in a trade deal between the US and India, they are not pricing in the chances of a global economic slowdown due to tariffs, it said.

On foreign fund flows, the brokerage said "... with recent market rally, relative return potential for Nifty has become unattractive for FIIs vs US treasuries (4.3%) & equity risk premium. Thus, we see risk to FII flows going forward." On Friday, FIIs had net sold Indian equities worth INR 64.50 billion after buying for five straight sessions before that. FII inflows are crucial to drive the benchmark indices further.

Analysts expect the indices to keep consolidating in the near term. "In the upcoming trading sessions, a strong close above 24900 could trigger short covering, while at lower levels, 24600 and 24500 serve as major support zones," Kshitija Salvi, technical analyst at IDBI Capital Markets & Securities, said.

Vatsal Bhuva, technical analyst at LKP Securities, also shared a similar view. "The trend remains sideways with a slight negative bias unless a range breakout occurs... immediate support is placed at 23630, where its 20-day EMA is placed, while positional support lies at 24500–24550," Bhuva said in a note. On Monday, the Nifty 50 ended at 24716.60 points, down 34.10 points or 0.1%, and the BSE Sensex closed at 81373.75 points, down 77.26 points or 0.1%. On Tuesday, the Nifty 50 is seen moving in a range of 24500-24900 points.  End

Edited by Saji George Titus

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