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File picture: The market will soon adjust to the US mood, and any cut in interest rate in the US will revive overall positive sentiment, say market players.
| Photo Credit:
ANI
The domestic market will see a big gap opening on Friday. Nifty may top 23,000 if the rally sustains throughout day, said analysts. US President Donald Trump announcements on a day-to-day basis will have a bearing on the markets, said analysts. According to them, the market will soon adjust to the US mood, and any cut in interest rate in the US will revive overall positive sentiment.
Meanwhile, analysts welcomed the rate cut by the Reserve Bank of India.
Deutsche Bank Research said: “We think it is a good strategy and would argue that in an accommodative monetary policy environment, the RBI should keep system liquidity surplus at least to the tune of 1 per cent of NDTL, so as to improve the efficacy of monetary transmission.”
While “the accommodative monetary policy provides policy rate guidance, without any direct guidance on liquidity management,” as the Governor stated, in our mind, liquidity stance ought to also be accommodative, to be consistent with the accommodative rates stance. “The real traction in monetary transmission only takes place when system liquidity turns into a persistent surplus. In 2019, when RBI started cutting rates in February, transmission gathered pace only when the central bank turned its stance to accommodative in June, also pushing the system liquidity to surplus territory. In this cycle, as well, in order to expedite transmission, system liquidity will need to be kept in surplus for a reasonable time period,” it said.
However, weak results from Tata Consultancy Services will keep the market under pressure, as it muted analysts expectation on Q4 performance. The focus will now shift to others such as Infosys and HCL Technologies.
Gift Nifty was also volatile in early deals on Friday and is currently ruling at 22,950 (7 am IST) against Nifty futures India close of 22,480, signalling a 450 points gain.
According to Emkay Global Research, the pause in tariffs by the US is a big positive.
“We pivot on our market view and now expect a strong India equities rally with earnings bottoming out, moderate valuations, and global uncertainty substantially reduced. We turn positive on Technology and Materials, while retaining OW on Discretionary and Healthcare. We cut our Staples exposure to zero, and retain UW on Financials. Expect some volatility, though, as news on tariffs ebb and flow, but ignore the noise and buy into any consequent corrections. We retain our Nifty target at 26,000 for Mar-26E,” Emkay Global said.
Analysts expect a muted Q4 and cautious outlook for FY26.
“In Q4FY25E, revenue growth in our coverage universe is likely to slow down to 3.5% YoY and earnings could see a decline YoY. Momentum for domestic cyclicals is set to stall as earnings decline for autos and banks YoY. On the other hand, commodities would have a mixed performance, with metals and cements likely to improve and oil & gas decline. We expect an earnings contraction yoy across all market caps,” said Elara Securities.
Meanwhile, equities across the Asia-Pacific region are down, tracking overnight weakness in the US stocks.
Published on April 11, 2025
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