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Informist, Wednesday, Oct. 8, 2025

 

By Gopika Balasubramanium

 

MUMBAI – Analysts are divided on the market's direction on Thursday, with some suggesting a bearish outlook ahead of the September quarter earnings and others maintaining a bullish stance. Some also said the indices will enter a consolidation phase with a negative bias. Investors will focus on the results of Tata Consultancy Services scheduled for Thursday.

 

"Trend is bullish as long as Nifty (50) is holding above 24800 (points)," Ashish Sherigar, technical analyst at NVS Brokerage, said. He expects the 50-stock index to find strong support at 24800 points and continue to face strong resistance at 25150-25200 points. 

 

However, Shrikant Chouhan, head of equity research at Kotak Securities, believes that as long as the Nifty 50 remains below 25,150, the weak sentiment is likely to persist. On the downside, it may slip to 25000-24950 points and further to 24850 points, he said.

 

Wednesday, the Nifty 50 closed at 25046.15 points, down 62.15 points or 0.3%. The 50-stock index closed above 25000 points for the third straight session but failed to cross 25200 points – a strong resistance – for the second straight day Wednesday. The BSE Sensex closed at 81773.66 points, down 153.09 points or 0.2%.

 

The market sentiment had turned upbeat last week after the Reserve Bank of India proposed reviewing capital market exposure guidelines for banks, which would allow banks to finance acquisitions by Indian corporations. These had fueled a rise in banking and financial services stocks. Some analysts said that foreign investors likely booked profits in these stocks Wednesday ahead of their earnings announcement. The 

 

ICICI Securities has projected a 10-basis-point decline in the net interest margin of banks, while also anticipating improvements in slippages and credit costs. 

 

Analysts seemed less concerned about the continued outflow of foreign funds from Indian equities, given the inflows from domestic investors, particularly through mutual funds. "Paradoxically, the current environment of FPI (foreign portfolio investors) selling is acting as a kind of safety valve for the Indian stock market, preventing them from going into excessive valuation territory like it did during the peak of Sep'24 (September 2024)," ICICI Securities said in its strategy report. "We believe that a combination of improving growth inflation dynamics and FPI selling, keeping a lid on irrational exuberance, is helping Indian equity markets to remain at healthy valuation levels," the broking firm said.

 

Some brokerages Wednesday said the draft framework issued by the Reserve Bank of India on risk weights across products will boost capital adequacy in banks. Banks with exposure to lending to housing, small- and medium enterprises, and credit cards will benefit, Citi was quoted as saying by NDTV Profit. The beneficiaries include large-cap companies such as HDFC Bank, ICICI Bank, Axis Bank, and the State Bank of India.  

 

Morgan Stanley, in its strategy report, said it expects positive revisions for companies in sectors such as energy and communication services. The September quarter is likely to drive India's earnings growth higher, given the policy stimulus, NDTV Profit said, quoting the report. Analysts at Morgan Stanley expect the net profit to rise in low single digits and revenue to increase in high single digits.  

 

Information technology stocks will be in focus in the upcoming sessions with TCS due to announce earnings Thursday. The information technology bellwether is expected to report muted earnings for the September quarter amid uncertainty on US tariffs and the continued impact of its deal with Indian telecom player Bharat Sanchar Nigam Ltd., according to analysts. 

 

"Nothing exciting is expected from this quarter from IT companies," a research analyst tracking the sector at a large brokerage said. "However, the commentary from the companies will likely be positive as there are signs of incremental improvement in the clients' spending," he added. "Most of the funds which are usually held back will likely be used for new initiatives," the analyst said. 

 

As for Tata Consultancy Services, the analyst noted that the company has issues that are particularly its own, rather than being industry-wide. "It is losing to other companies in the industry and deal wins have started slowing down," the analyst said, adding that it needs to win mega deals to do better. The Mumbai-based company's consolidated net profit for the quarter is expected to decline by 2% sequentially, and revenue is expected to fall by 3% from the previous quarter, according to the average of estimates from 11 broking firms.

TCS is scheduled to detail its quarterly results on Thursday. The IT company will not hold a post-earnings press conference this time as the results are being announced on the first death anniversary of Ratan Tata, the former chairman of the Tata group. The post-earnings investor call of the company is scheduled for 1900 IST Thursday.  End

 

Edited by Saji George Titus

 

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