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Informist, Friday, Sept. 26, 2025

 

By Simran Rede

 

MUMBAI – Indian equity market is expected to continue its decline next week as the Nifty 50 failed to sustain 25800–25900 levels, analysts said. A fresh wave of US tariffs on pharmaceutical products triggered caution in the market on the backdrop of uncertainty over a trade deal with the US and a depreciating rupee. On the other hand, market participants also await the outcome of the Reserve Bank of India's Monetary Policy Committee meeting next week.

 

The Nifty 50 settled at 24654.70 points, down 236.15 points, or 1%. The BSE Sensex closed the day at 80426.46 points, down 733.22 points, or 0.9%. Both the indices closed lower for the sixth straight session, with the Nifty 50 logging a 3?cline over this period. Only six of the 50 stocks in the Nifty 50 closed in the green Friday. The Nifty 50 is over 6% away from its all-time high of 26277.35 points touched exactly one year ago on Sept. 27, 2024.

 

Going ahead, the Nifty 50 will find support at 24600–24400 points and face resistance at 24800–24900 points, according to technical analysts. The index is expected to move in the negative territory in the near term, but there are very few expectations of it breaching 24000, analysts said. "Nifty (50) has been in a range of 24500-25500 (points) and is likely to continue this rangebound movement for the next 2–3 months," said Pankaj Karde, executive vice-president at BOB Capital Markets.

 

The expiry of the monthly derivatives contract of Nifty 50 is seen at 24500–24550 points. This will be the first monthly expiry of the monthly contract on Tuesday. For the market to rise or fall sharply, some major news development should trigger the push, Karde said. He does not expect any significant impact from a potential trade deal with the US. Hence, he suggests stock-specific action to guide the market in a lacklustre mood. Wait-and-watch will be the strategy among market participants, he said.

 

On the earnings front, the September quarter earnings are expected to be tepid, and the companies are unlikely to have any outperformance in the earnings, Karde of BOB Capital Markets said. The rationalisation of goods and services tax is seen benefitting from the December quarter earnings. Additionally, major tailwinds such as a huge cut in the interest rates by the Reserve Bank of India, and tweaks in the income tax slabs are expected to aid the December quarter and the March quarter earnings.

 

Market participants will widely track the outcome of RBI's Monetary Policy Committee meeting due Wednesday. The MPC is expected to hold the interest rates for the second meeting in a row after the country's GDP grew faster than expected in the June quarter, according to economists polled by Informist. While eleven of the 15 economists polled by Informist expect the rate-setting committee to keep the repo rate unchanged, Barclays, Capital Economics, Morgan Stanley, and Nomura see a 25-basis-point interest rate cut at the meeting next week. In August, the six-member panel unanimously left the repo rate unchanged at 5.50%. The MPC has reduced the policy repo rate by 100 bps so far in 2025.  

 

While Indian equities have underperformed emerging markets by 32 ppt (percentage points) since mid-September 2024, the worst performance since 2001, HSBC Global Investment Research now finds the market attractive. The brokerage expects the Indian stock market to "return to form" after its recent underperformance. With lower valuations, a slow recovery in earnings, and low positioning by foreign funds, the brokerage is positive on the domestic equity market, it said in a report Friday. It expects foreign funds to return to India after an absence of 12 months amid crowded regional markets, a weak dollar, and resumption of interest rate cuts by the US Federal Reserve.

 

Among individual stocks, Hindustan Unilever will be in focus Monday after the company Friday said due to the transitory impact of the recent goods and services tax reforms, the company expects consolidated business growth for the September quarter to be near flat to low-single digit. "This is a one-off, transitory impact, and we anticipate recovery starting November as prices stabilise, underpinned by rising disposable incomes and our ongoing portfolio transformation actions," the fast-moving consumer goods bellwether said. With the revised GST rates, nearly 40% of HUL's portfolio now attracts a reduced GST rate of 5%, down from 12% or 18?rlier.  End

 

Edited by Deepshikha Bhardwaj

 

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