The domestic markets are expected to open on a positive note on Thursday, as the domestic macro economic numbers were positive. Positive global cues will also aid market sentiment, said analysts. According to them, the consolidation phase will continue given the strong support at lower levels. Gift Nifty 22,555 signals a marginal gain. Analysts expect low-volume trading and profit-booking in the latter part of the day due to a holiday tomorrow on account of Holi. Retail participation will also be lower given the long weekend, they observed.
In its Market Health Check report, Emery Global Research said: The market seems to be stabilising after the sharp fall – our market health check indicates that valuation froth has dissipated and flows are improving at the margin. The key factor would be the earnings outlook and relative stability of FY26 forecasts during the April 2025 earnings season, which could be the next trigger.”
India’s retail inflation fell to a seven-month low of 3.61% in February 2025. This was largely driven by a drop in food inflation to 3.75%, the lowest since May 2023. “This paves the way for RBI to consider another rate cut in 2025 and fuel economic growth. The downward trend seen in both rural and urban inflation will provide relief to households, leading to higher spending and investment. Cost pressures on companies will also reduce, and muted earnings in the last few quarters could revive, said Ajay Garg, CEO, SMC Global Research. According to him, with a drop in inflation, sectors such as FMCG and automobiles could benefit from higher spending by consumers.
Growth in India’s industrial production accelerated to a better-than-expected 5% in January from 3.5% in December. According to Rajani Sinha, Chief Economist, CareEdge, the industrial performance was majorly supported by growth in manufacturing and mining output, while electricity growth moderated.
“From a consumption perspective, consumer durables output was encouraging, rising by 7.2 per cent, while non-durables output disappointed, with a contraction of 0.2 per cent. The improvement in consumption demand remains critical from the standpoint of boosting the investment scenario, he said, adding infrastructure/ construction and capital goods have logged a strong performance, with 7 per cent and 7.8 per cent growth, respectively, in January. Improving public capex also bodes well for the performance in these categories.
Devarsh Vakil – Head of Prime Research, HDFC Securities, said: This dual economic surprise — inflation cooling more rapidly than anticipated, while industrial production demonstrates unexpected vigour — creates an ideal macroeconomic environment likely to energise bullish market sentiment.
The US inflation numbers, too, surprised positively at 2.8 per cent, signalling the possibility of rate cuts. “This number was lower than expected and closer to 2%, is a welcome relief. However, more than the inflation number, the markets are now worried about a recession or a slowdown, which might be triggered due to the tariff wars,” said Apurva Sheth, Head of Market Perspectives and Research, SAMCO Securities
