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Informist, Thursday, Jun. 12, 2025

By Akash Mandal

MUMBAI – Benchmark indices are likely to move in a thin range Friday after a sharp downward swing on Thursday as the Nifty 50 broke its six-session winning run. While some analysts still maintained that the bias in the market is positive, others said that the bias has turned negative following the sharp fall Thursday. On Friday, the Nifty 50 is expected to move in a range of 24700-25000 points. A better-than-expected inflation print for May might also boost the sentiment.

"Indices are likely to mostly bounce back after such a sharp fall... but if it opens with a gap down, the Nifty might test the 24500 levels," Jigar Patel, senior manager of equity research at Anand Rathi Shares & Stock Broker, said. "The view is sideways overall, but the sentiment bias is positive," Patel said. However, some analysts were cautious about the market after the sharp fall on Thursday. "We have entered the congestion zone again... sustenance below 24800 (for the Nifty 50) will be a negative development, and might take it lower towards 24600 spot levels," a technical analyst at a domestic brokerage said.

On Thursday, the Nifty 50 closed at 24888.20 points, down 253.20 points or 1.0%, and the Sensex closed at 81691.98 points, down 823.16 points or 1.0%. The Nifty 50 closed below the 25000-point level after four sessions and slipped below the 24900-point level intraday after three sessions.

Sentiment may be buoyed after inflation fell to an over six-year low of 2.82% in May from 3.16% in April and lower than an Informist estimate of 3.0%. Food inflation, a persistent pain point for the Reserve Bank of India, fell to 0.99% in May from 1.78% in the previous month. "We expect CPI inflation to remain at comfortable levels in the near term, averaging 4% for FY26... however, downside risks from supply chain disruptions due to trade policy uncertainties and geopolitical tensions remain key monitorable," Rajani Sinha, chief economist at CareEdge, said in a note.

Investors will continue to monitor the bubbling conflict in West Asia as media reports said the US is evacuating some of its personnel from Iraq due to heightened security risks. While the US is chasing a nuclear agreement with Iran, the latter has threatened to strike US bases in the region if conflict escalates. The US and Iran have held five rounds of talks since April as President Donald Trump seeks an agreement that would place constraints on Iran's uranium enrichment programme.

HSBC is still cautiously positive on Indian equities in the medium term. "Indian markets are well placed amidst global uncertainty and trade tensions... as per our proprietary positioning data, Asia and GEM funds have started to rebuild positions in India, but global investors are still cautious," the global brokerage said in its strategy report Wednesday. A weaker dollar and softer inflation may help support foreign inflows in the coming months, the brokerage said. "Indian equities rebounded notably in the past few weeks on the back of lower domestic bond yields, now down to a 3-year low... however, we remain concerned about the growth outlook and find valuations elevated," it said.  End

Edited by Saji George Titus

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