The first day of the financial year 2025 will begin on a flat note with positive bias. Gift NIfty at 22,534 against NIfty April futures close of 22,488, signals a gap-up opening of about 50 points for Nifty.
However, analysts expect the market to move in a narrow range ahead of RBI policy, Q4 results, and India Inc.’s FY25 outlook. They feel the general election will likely dampen trading interest in the coming days.
FY24 - stellar show
FY24 marked a rewarding period for the Indian market. Large caps recorded a substantial 33 per cent return, mid-caps surged by 56 per cent, and small caps excelled with an impressive 63 per cent.
“It was loaded by the upgrade in FY24 economy growth, as the Indian GDP forecast was uplifted on a QoQ basis from 6.4 per cent to 7.3 per cent during the year. There was a rampage in corporate earnings growth, like with the 23-24 per cent YoY EPS forecast for the Nifty50 index, said Vinod Nair of Geojit Financial Services.
Retail inflows remained robust, supported by direct investments as well as investments through MFs. The number of trading accounts held by domestic investors reached 16.7cr, underscoring increased market participation. Additionally, FIIs exhibited improved net buying activity, buoyed by India’s economic outperformance relative to other EMs experiencing slowdowns, he further said.
‘No change in rates’
Pravesh Gour, Senior Technical Analyst, Swastika Investmart, said: the RBI Monetary Policy Committee (MPC) is set to start its 3-day meeting deliberating interest rates and analysing the state of the economy on April 3 and will end on April 5.
“Reports suggest that the RBI is likely to keep interest rates unchanged at this meeting. Auto stocks will also be in focus as auto companies will announce the monthly sales numbers for March starting from April 1, 2024. Additionally, people will be watching how the rupee fares against the dollar and keeping tabs on crude oil prices. They’ll also be keeping an eye on investments made by foreign institutional investors (FIIs) and domestic institutional investors (DIIs).”
Asian stocks mixed
Meanwhile, Asia-Pacific stocks are mixed, and most have closed. Japan stocks are down, while Chinese, Singapore, and Taiwan stocks are up in early trade.
According to Arvinder Singh Nanda, Senior Vice President of Master Capital Services Ltd, The outlook for the market will be guided by the major global and domestic economic data, India automobile sales, US and India Manufacturing purchasing managers indices (PMI), US job Openings, Factory Orders and US non-farm Payrolls, and Unemployment Rate.
“The Reserve Bank of India’s Monetary Policy Committee will meet on April 3-5, 2024, and decide on policy rates. The monetary policy statement will provide important cues on the economy, inflation and interest rates,” he added.
Nair said: “ As we move on to a new financial year, we express optimism towards sectors such as Pharma, Capital Goods, and Infra, as we see them as key growth drivers, supported by both domestic and external demand.”
He said, “although some sectors like FMCG and IT are facing challenges due to subdued demand at present, we anticipate a turnaround, driven by expectations of a normal monsoon and increased US demand following the Fed’s rate cut. However, the focus is on large caps, as the premium valuation of Midcaps could have a hiccup in the short to medium-term.”