More Stories

Informist, Tuesday, Aug. 19, 2025

 

By Gopika Balasubramanium

 

MUMBAI – India's headline indices are seen rising Wednesday as foreign investors are likely to cover their short positions till the expiry of monthly futures and options contracts for August. Investors will also keep an eye on updates regarding US President Donald Trump's attempts to broker a ceasefire between Russia and Ukraine. While some analysts say the proposed goods and services tax cut could boost Indian corporate earnings by driving demand in the second half of 2025-26 (Apr-Mar), others say potential price hikes by companies could offset the tax reduction, negating any benefits for consumers.

 

Traders have maintained short positions on stock market for some days now amid uncertainty over tariffs and lower-than-expected earnings, the proposed goods and services tax rejig was more like a fillip to the market to rise, said Narendra Solanki, head of research at Anand Rathi Shares and Stock Brokers. "Definitely, it (GST proposal) will have a positive impact on both revenues as well as earnings of Indian corporate," Solanki said. Companies will be passing on some of the benefits to customers, a move which is seen strengthening demand outlook, especially in the second half of this financial year, he added. "It cannot be ascertained in absolute terms, as companies will be using different strategies to tap the benefits," he said.

 

Contrary to Solanki's views, Kotak Securities in a research report said, "However, companies may take price hikes before the anticipated GST rate cuts in 2HFY26 (Oct-Mar) or aggressive price hikes in FY2027. We note that most of the potential beneficiary sectors/companies of lower GST rates enjoy high profitability/return ratios anyway." For the GST cut to be effective, companies must pass on the lower rates to consumers by reducing prices.

 

On Tuesday, the Nifty 50 closed at 24980.65 points, up 103.70 points or 0.4%. The 50-stock index failed to close above 25000 points for the second straight session. The BSE Sensex closed at 81644.39 points, up 370.64 points or 0.5%. The broader market indices also rose, outperforming their benchmark peers. They gained 0.7-1.0%, with the mid cap indices rising more than the small cap ones. 

 

"Investors have started covering short positions in F&O market, and is expected to continue in the coming sessions till Thursday, expiry of monthly contracts," said Nandish Shah, senior derivatives and technical analyst at HDFC Securities. "The impact of the short covering will be seen in cash market as well with Nifty slowly climbing to 25200-25300 in the coming sessions," he said. "As far as Nifty 50 does not close below 24700 points, the trend remains positive," he added.  

 

Analysts said investors will eye developments among the US, Russia, and Ukraine amid Trump pushing for a ceasefire. The meeting between Zelenskyy and Trump, however, did not reward a significant outcome such as a ceasefire agreement, it was still positive. This comes after the recent meeting between Trump and its Russian counterpart Vladimir Putin which also did not yield a desired outcome.  End

 

Edited by Subhojit Sarkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.