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Informist, Wednesday, Sept. 10, 2025

 

By Gopika Balasubramanium

 

MUMBAI – The benchmark equity indices are expected to continue moving in a narrow range Thursday though market sentiment remains positive. For the Nifty 50, the next hurdle is 25000 points, a level that it breached for a while Wednesday. Analysts said it is crucial for the 50-stock index to sustain itself above this mark. Further developments on trade negotiations between India and the US will be crucial for deciding the market's direction, given the heightened expectations that the two countries will be able to resolve their issues. Market participants will also keep an eye on the trade talks between the European Union and India, which began Monday.

 

Data from the derivatives market showed call contracts between 25000 and 25200 strike prices were bought, indicating room for an upside. At the same time, put contracts were sold at the psychologically important 25000 strike price, showing that the level is likely to be sustained. Wednesday, the Nifty 50 closed at 24973.10, up 104.50 points or 0.4%. The 50-stock index faced strong resistance at 25000 points, which it crossed for the first time in two weeks. Technical analysts now see the 50-stock index finding support at 24800-24750 points and facing resistance at 25000-25150 points.

Analysts said it is important for the index to stay above this level to see a further rise. However, they also advise caution because the current rally is sector-specific and not broad-based. Stocks of fast-moving consumer goods, automobile, and retail companies have risen sharply after the Goods & Services Tax Council rejigged tax rates. While information technology stocks have mostly been under selling pressure, stocks of banking, financial services, and insurance companies have been largely range-bound.
 

Analysts expect banking stocks to continue to consolidate in the upcoming sessions. Banks' September quarter results are likely to be muted owing to pressure on their net interest margins. "Moreover, any further rate cut by the RBI (Reserve Bank of India) may delay the NIM recovery," Sunny Agrawal, head of research at SBICAP Securities, said. "We expect banking stocks to start delivering healthy credit growth on retail portfolios during the festive season. Overall, Oct-Mar looks better for banking."

 

Information technology stocks have rallied these past two sessions, tracking gains in the tech-heavy NASDAQ Composite Index, which is at an all-time high. Short-covering can be expected in IT stocks if there are positive developments on the US tariffs front, or if the US Federal Reserve trims its federal funds rate, Agrawal of SBICAP Securities said. "Buyback by companies like Infosys is price-supportive," he added. "Fundamentally, acceleration in deal wins and execution in the backdrop of rapid adoption of artificial intelligence will be the key monitorable (parameters)." Valuations of large-cap IT stocks are relatively cheaper than the valuations of mid-caps, he said, adding that the Street is "willing to pay a premium for better growth" in the case of mid-caps. 

 

Meanwhile, to save the economy from taking a big hit from US tariffs, India's government is in talks with several countries such as Qatar, Oman, and Peru for trade deals. In July, India signed a trade pact with the UK to bring down duties. The government is also negotiating a free trade agreement with the European Union that is expected to help relieve stress in sectors that are currently reeling from the steep US tariffs. India and the EU may be able to "substantially" conclude the negotiations this week, Commerce and Industry Minister Piyush Goyal said Tuesday.

 

Fitch Ratings Wednesday raised its forecast for India's GDP growth for the current financial year to 6.9% from 6.5% projected in June. "Domestic demand will be the key driver of growth as strong real income dynamics support consumer spending and looser financial conditions should feed through to investment," it said. For Apr-Jun, the country recorded GDP growth of 7.8%, a five-quarter high.  End

 

Edited by Rajeev Pai

 

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