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Informist, Monday, Jun. 30, 2025

By Gopika Balasubramanium

MUMBAI – India's headline indices are likely to consolidate on Tuesday after the recent sharp gains, with profit-booking at higher levels, analysts said. The 50-stock index is expected to consolidate between 25200 points and 25800 points, though rich valuations of the large-cap stocks are a concern, they said.

"Sectors such as defence, real estate, banking, financial services, and insurance have surged recently, and the trend is likely to continue, even if there is a temporary blip," the head of research at a small-sized brokerage said. Expressing concerns about the rich valuations of Nifty 50 constituents, the research head said a correction is likely if the June quarter earnings are not up to the mark.

He expects pharmaceutical companies to report better earnings, especially those with exposure to the US on account of a surge in sales due to fears of impending US tariffs. The research head is neutral on the performance of companies in sectors such as capital goods, real estate, and information technology and negative on the automobile sector as a whole, though there may be positive surprises from select companies. 

Meanwhile, brokerages Nomura Global Markets Research and Nuvama Institutional Equities expect the consumer goods sector in India to report marginal growth in sales and volume in the June quarter, with rural demand leading the growth momentum. 

While urban demand is expected to remain weak, as in the previous quarters, consumption could be stable at lower levels, Nomura said. On the other hand, demand from rural areas is expected to improve in the June quarter, driven by moderating food inflation and on expectations of a good crop output on the back of an above-normal monsoon forecast, the brokerages said. 

HSBC Global Research said in a report that "a good monsoon will help contain inflation, boost real wages, and raise the purchasing power of informal sector consumers." Strong sowing activity has increased the growth in nominal wages of agricultural workers in rural areas, improving to 8% in April from 6.5% in the last few months, the report said. Further, the fall in inflation has also helped in improving real wages, and this will boost mass consumption in the months ahead. 

The Nifty 50 ended at 25517.05 points, down 120.75 points or 0.5%. The BSE Sensex closed at 83606.46 points, down 452.44 points or 0.5%. Shrikant Chouhan of Kotak Securities said 25470 points is a crucial level for the Nifty 50. A break below this will lead the index to fall toward 25375–25300 points, and sustaining above 25470 points could push the 50-stock index to 25600-25700 points. 

Automobile stocks will be in focus as companies are scheduled to report their wholesale sales numbers for June from Tuesday. Wholesale sales of two-wheelers and tractors in June likely increased year-on-year, but passenger and commercial vehicle sales could fall due to subdued demand, analysts said.  

Nomura sees a 3% on-year rise in two-wheeler sales in June, while Nuvama has forecast a 7% on-year increase. Nomura and Nuvama expect wholesale volumes of the passenger vehicle segment to decline 5% on year in June. The brokerages see a 6-7% growth in domestic tractor sales in June.  End

Edited by Saji George Titus

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