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Informist, Monday, Sept. 22, 2025

 

By Simran Rede

 

MUMBAI – The headline indices are likely to move in a range Tuesday after coming under selling pressure Monday. Information technology stocks are likely to fall further with sentiment around these stocks continuing to be negative, analysts said. This follows the increase in the application fee for the US H-1B visa.

 

Monday, the Nifty 50 settled at 25202.35 points, down 124.70 points or 0.5%. The BSE Sensex ended at 82159.97 points, down 466.26 points or 0.6%. Despite macroeconomic headwinds, including rising geopolitical tensions, tariff-related developments, and the H-1B visa fee hike, the Indian equity market has been resilient, analysts said. Currently, the Nifty 50 is sustaining above 25000 points and key support for the index is seen at 25050 points.

 

The immediate support for the benchmark index is seen at 25150 points and the immediate resistance is pegged at 25260 points, according to technical analysts. If the index breaks through this resistance level, it could climb to 25370 points, they said. The 50-stock index is expected to move in a range of 25000–25500 points over the next few sessions, they said.

 

However, some analysts remain bullish on the market. "We maintain a constructive view and believe the ongoing corrective pullback presents a tactical buying opportunity within the broader uptrend," Bajaj Broking Research said in a note.

 

The India Volatility Index, the market's fear gauge, closed higher for the second session, suggesting a rise in nervousness among investors. The India VIX rose nearly 6% to 10.5500 Monday. The index is down more than 10% so far this month, but historical trends suggest a potential for sharp volatility spikes following such lows, Systematix Shares and Stocks (India) said in a report. "VIX has moved significantly away from its 50-DMA (50-day simple moving average) and a mean reversion move suggests we may see further uptick in the near term," said Bhavya Shah, technical research analyst at StoxBox.

 

While the $100,000 H-1B visa application fee is expected to have a median 40-basis-point impact on the margins of companies under PL Capital's coverage for the financial year 2026-27 (Apr-Mar), the effect is seen to be marginal for most firms as H-1B visa dependency has already reduced sharply, said Vikram Kasat, head of advisory at PL Capital, in a note. LTIMindtree may take a 130-bps hit given its higher exposure, he said.

 

Sumit Pokharna, vice-president of fundamental research at Kotak Securities, expects the impact of the fee hike to be seen in the upcoming H-1B visa lottery cycle from the second half of FY27 and the full impact in FY28. However, this impact could be lower with a few offsets, including higher use of nearshore and offshore locations, he said in a note. "Our bear case assumes no changes in sourcing patterns and increased competition for onsite talent, leading to 10% wage inflation, in which companies would have 100-200 bps margin impact and 7-14% on FY27 EPS (earnings per share)," Pokharna said. "Our base case is that companies would prefer replacing expiring H-1Bs with subcontractors in the near term, paying 20-25% higher wages on average."

 

The September quarter corporate earnings are likely to have witnessed a slowdown, primarily due to higher-than-normal rains and deferment of purchases, particularly discretionary purchases, in anticipation of the restructuring of the goods and services tax. Dealers remain optimistic and expect a strong rebound in volumes given price adjustments of 10-14% on stock-keeping units that have been moved to the 5% GST slab from 18% and 6-7% on stock-keeping units that have been moved to the 5% slab from 12%, Prabhudas Lilladher Institutional Equities said in a report. "We believe superior go-to-market activities and superior supply chain enabled (consumer) companies to gain (market) share, in addition to benefits of price cuts. We (expect) history to repeat itself as GST cuts will be an icing on the cake with benefits from income tax cuts, interest rate cuts, low inflation, and normal monsoons," the brokerage further said.

 

"Currently, the valuations (of Nifty 50 stocks) are decent, and we do not see much downside," Narendra Solanki, head of research at Anand Rathi Share and Stock Brokers, said. He expects the Nifty 50 to reach 27000 points in the next 12 months. Additionally, he sees the impact of GST rate cuts becoming visible in the December and March quarters, with the September quarter earnings being similar to the June quarter results.  End

 

Edited by Rajeev Pai

 

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