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Informist, Wednesday, Jun. 11, 2025

By Akash Mandal

MUMBAI – The benchmark indices are likely to continue to consolidate Thursday ahead of the weekly expiry of the Nifty 50 derivatives contracts. The underlying sentiment remains positive, but gains are likely to be capped this week as the market cools after rising over 2% in four sessions ending Monday. The Nifty 50 is seen moving in a range of 25100-25500 points Thursday. The 50-stock index has closed above 25000 points for four consecutive sessions, the longest such run since October.

"From a technical perspective, the index is trading above the high of its recent trading range, and the overall bias remains bullish," said Kshitija Salvi, technical analyst at IDBI Capital Markets & Securities. "A buy-on-dips strategy is recommended for the day," she said, adding that stock-specific action is expected to drive the market. 

Shrikant Chouhan, head of equity research at Kotak Securities, also expects the market to be in a range. "On the daily charts, it (the Nifty 50) has formed a small doji candlestick pattern, indicating indecisiveness between the bulls and bears. We believe that as long as the market trades within the 25000/82000 (Nifty 50/Sensex) to 25200/82700 range, this range-bound behavior is likely to continue," Chouhan said in a note. "A successful breakout above 25200/82700 could push the market up to the 25350–25400/83000-83300 levels," he added.

Wednesday, the Nifty 50 ended at 25141.40 points, up 37.15 points or 0.2%, and the BSE Sensex closed at 82515.14 points, up 123.14 points or 0.2%. While many heavyweights such as HDFC Bank, State Bank of India, and Axis Bank ended in the red, some like ICICI Bank and Reliance Industries ended higher and supported the market.

Analysts remain divided on the possiblity of further rate cuts this year. While the Reserve Bank of India's policy actions Friday were "aggressive" and better than what the market had expected, participants were also left confused regarding the interest rate trajectory after the apex bank had changed its stance to 'neutral' from 'accommodative.' Many analysts, however, still expect some rate cuts in 2025.

"...the RBI has decisively eased liquidity conditions and cut rates by 100 bps rapidly. This shall limit economic downside. Yet, the key question is who will multiply the liquidity into money," Nuvama Institutional Equities said in a report. "Government is debt-averse and corporates are improving their already-high FCF (free cash flow) by keeping a lid on wages and capex (capital expenditure). Thus, neither can multiply liquidity... surely, HH (households) can resume levering up, but a soft income dynamic restricts its ability to buoy demand."

The brokerage said rate cuts are most effective when matched by fiscal expansion and a rebound in exports, which look unlikely this time round. Despite the RBI's measures seeming "aggressive", Nuvama noted that credit growth had slowed in the past at a lower repo rate of 4%. With the market left with more questions than answers, investors will now focus on macroeconomic data, both globally and on the domestic front, ahead of the central bank's next policy meeding on Aug. 5-7.  End

Edited by Rajeev Pai

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