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Domestic markets are expected to open on a positive note on Friday amid positive global cues. Analysts expect the relief rally is likely to continue, as US stock markets bounced back on expected rate cuts sooner than later following encouraging inflation data. Gift Nifty at 24,350 suggests a gap-up opening of about 200 points in early trade on Friday.
With the result season for the first quarter of the current season coming to an end, analysts expect the market to move into a consolidation phase. Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said, “We expect the market to continue to consolidate in the near term and take cues from global factors.”
Domestic brokerage Motilal Oswal Financial, post-Q1 analysis, said: “We expect the earnings momentum to sustain; albeit, the magnitude of its growth is expected likely to moderate to about 15 per cent over FY24-26. The corporate earnings scorecard for 1QFY25 has met expectations been in-line, with heavyweights such as HDFC Bank, Tata Motors, ICICI Bank, Maruti Suzuki, and TCS driving the aggregate.”
The earnings spread has been decent, with 57 per cent of the our MOFSL Coverage Universe either meeting or exceeding profit expectations. However, growth has primarily been led by the BFSI and Auto sectors, it said.
“The Nifty is trading at a 12-month forward P/E of 20.1x, near to its own long-period average of 20.4x. Industrials and Capex, Consumer Discretionary, Real Estate, and PSU Banks are our key preferred investment themes. We remain OW on PSU Banks, Consumption, Industrials, and Real Estate. We recently raised IT to marginal OW from UW, while and we cut Auto from OW to UW. We also turned OW on Healthcare from Neutral, while maintaining our UW stance on Pvt Private Banks Banks and Energy within our model portfolio.” It added.
Meanwhile, Asian stocks are up in early trading on Friday. Despite the positive mood all around, analysts advise investors to remain stock-specific.
Rajesh Bhosale, Equity Technical Analyst, Angel One, said the broader market remains under pressure, reflecting a bearish tone, with only selective stocks performing well. “Therefore, traders are advised to avoid complacent bets and be selective in stock choices. Additionally, it’s important to monitor global developments and focus on the mentioned levels, ideally trading in the direction of the breakout rather than wavering between trends.”
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