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Informist, Wednesday, Jul. 2, 2025

By Gopika Balasubramanium

MUMBAI – The Indian equity indices are likely to open flat Thursday ahead of the weekly expiry of the Nifty 50 futures contract. Analysts expect selling for profit at higher levels to continue for some time and say the downside is limited for the short term. Traders will now turn their attention to earnings for the June quarter and also monitor key developments on the prospective trade deal between India and the US.

"There could be some profit-booking in pockets that have run up a bit, now that the earnings season will start soon," said Nandish Shah, technical analyst at HDFC Securities. "This is just a normal correction in a bull market and the downside seems limited. But it (the Nifty 50) can correct till 25260 points, a key support level." Buying on dips would be the strategy for traders in the near term, Shah said. He expects the Nifty 50 to find support at 25200 points and face resistance at 25800 points.

On Wednesday, the Nifty 50 closed at 25453.40 points, down 88.40 points or 0.4%. The index ended below the key support of 25500 points after closing above this level for four straight sessions. The BSE Sensex closed at 83409.69 points, down 287.60 points or 0.3%.

IDBI Capital in its strategy report said the Nifty 50 is trading at 22 times its one-year price-to-earnings forward multiple and most of the positives are already priced in. This implies limited room for further valuation expansion. "In the short term, the market is likely to consolidate and remain rangebound as it digests the recent gains," the brokerage said. However, the medium-term outlook remains positive, with an upward trajectory expected, it added.

"Nifty 50 will likely see a flat-to-positive opening on Thursday," Kshitija Salvi, technical analyst at IDBI Capital Markets & Securities, said. The indices are likely to consolidate for a while, and even if there is a correction, the Nifty 50 is unlikely to fall below 25100-25000 points, she said. Salvi expects the Nifty 50 to find support at 25300 points and face resistance at 26000 points.

Some analysts said an India-US trade deal could lift the indices to new highs. However, these gains will be sustained only if there is a strong earnings comeback, they added.

In the days to come, any development with respect to the India-US deal would be monitored closely, analysts said. US President Donald Trump has said the US is likely to have a "different kind of a deal" with India. Trump said the deal would let American companies compete with their Indian counterparts. "Right now, India does not accept anybody in. I think India is going to do that, and if they do that, we are going to have a deal for much less tariffs...," Reuters reported Trump saying. Trump also said that the pause on tariffs was unlikely to be extended beyond Jul. 9.  End

Edited by Rajeev Pai

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