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Informist, Thursday, Aug. 21, 2025

 

By Simran Rede 

 

MUMBAI – Headline indices are likely to move in a tight range Friday, similar to the range-bound movement seen on Thursday. The proposal to rationalise the goods and services tax rate to a two-slab structure and a sharp improvement in India's flash purchasing managers' indices are expected to keep the market mood positive. Global geopolitical developments will also direct the market movements, analysts said.

 

The Nifty 50 closed at 25083.75 points, up 33.20 points or 0.1% and the BSE Sensex ended at 82000.71, up 142.87 points or 0.2%. The Nifty 50 is likely to face resistance at 25250 points and find immediate support at 24850 points, Mugilan K, technical analyst at DBS Cholamandalam Securities, said. The next support for the index is seen at 24300 points, he said. 

 

The proposed lowering of GST rate slabs is likely to improve the earnings of sectors such as consumer durables, fast-moving consumer goods, automobile, cement, pharma, banking, financial services, and insurance. However, they are unlikely to have an impact on sectors such as information technology, energy, and metals.

 

If implemented, the changes in GST rates will likely result in a 4-5% rally in the market in the next 1–2 quarters, Pravin Bokade, head of research at IDBI Capital Markets & Securities, said. He doesn't see a significant improvement in earnings growth for one to two quarters, with the September quarter likely to be a weak quarter for corporate earnings. On the other hand, if the changes in GST rate are not implemented, the market is likely to be rangebound, he said. The Centre expects the revamped GST regime to come into effect before the end of 2025-26 (Apr-Mar).

 

To address revenue loss and concerns about the government's capital expenditure, Bokade expects the government to disinvest in companies. Earlier this month, Divestment Secretary Arunish Chawla said the government expects to finalise the bidder for stake sale in IDBI Bank by March. The government will invite financial bids for the bank after October and hopes to get them by December, Chawla had said. 

 

On the earnings front, the growth in net profit of non-banking financial services was mixed. Most loan segments witnessed some stress due to the weak economy and unseasonal rains, CNBC-TV18 cited global brokerage Jefferies as saying. The net interest margins were flat on a sequential basis but are expected to improve in the September quarter, especially for SBI Cards and Payment Services and Cholamandalam Investment and Finance Co., the brokerage said. It also expects the earnings growth and credit growth of NBFCs to stabilise in Oct-Mar, driven by post-monsoon demand. 

 

Eyes will also be on India's relations with China following the recent visit of Chinese Foreign Affairs Minister Wang Yi. Prime Minister Narendra Modi is scheduled to visit China on Aug. 31 to attend the Shanghai Cooperation Organisation summit. Investors will also keenly await the comments of Federal Reserve Chairman Jerome Powell at Jackson Hole on Friday to gauge the interest rate trajectory in the US.  End

 

Edited by Saji George Titus

 

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