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Informist, Tuesday, Jun. 3, 2025

By Akash Mandal

MUMBAI – Benchmark indices are likely to continue to move in a thin range Wednesday, with the outcome of the Reserve Bank of India's monetary policy meeting likely being the next trigger for the market. After the market ended lower Tuesday, many analysts, who have been holding a positive view for quite some time, have turned cautious for the near-term.

"The Nifty 50 continued to experience selling pressure, closing with a bearish candle and heading towards its demand zone at 24500... If 24500 is breached on a closing basis, we could see a loss of momentum, and the index may approach 50 SMA (simple moving average) at 24038 levels," a technical analyst at a domestic brokerage said. The analyst said the bias has now turned cautious from positive.

Bajaj Broking Research was also cautious in its outlook for the market. "We expect the index to extend the last 15 sessions' consolidation in the range of 24400–25080 zone... a breakdown below the support area 24500-24400 levels will signal acceleration of the decline," the brokerage said in a note.

The market is probably pricing in some negative news it expects in the future, as there are no reasons on the domestic front for the market to fall, Ajit Mishra, senior vice president of technical research at Religare Broking, said. "We can see further selling pressure if the Nifty falls below 24500... while on the charts it seems the Nifty may fall as low as 23900-23700, I feel it is unlikely to break the 24000 level," Mishra said. He said investors should be cautious even while buying on dips, as he sees the Nifty 50 falling 200-300 points in the near term. 

On Tuesday, the Nifty 50 closed at 24542.50 points, down 0.7%, and the BSE Sensex closed at 80737.51 points, down 0.8%. For Wednesday, the 50-stock index is likely to face resistance at 24600 points, while 24400 points will act as support.

The continued back-and-forth over the trade deal between the US and China has fanned uncertainty and volatility in the market in recent times. "Uncertainty remains elevated, and stocks will likely be choppy," Nomura Global Markets Research said in its strategy report focusing on Asian markets. The brokerage remained 'overweight' on India and China. "We expect India to be among the first countries to sign an "interim" trade deal with the US, enabling it to lower its reciprocal tariff rate to 10%, below the US tariff rate on China. This should provide India with a tariff advantage over its competitors, leading to benefits from trade diversion and supply-chain shifts," the report said. 

Despite the positive GDP growth, Nomura said the fine print was weak, with private consumption and private capital expenditure both slowing down. While the RBI's accommodative monetary policy is a tailwind, the brokerage expects policy transmission to take more time. It sees India's GDP growth moderating to 6.2% in 2025-26 (Apr-Mar).  End

Edited by Saji George Titus

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