The fresh tariff of 104 per cent imposed by US President Donald Trump on China reinvigorated panic selling across global stocks. Asian stocks, led by Nikkei, plunged between 0.5 per cent and 3.5 per cent. Pharma stocks will come under renewed pressure as Trump has threatened additional tariff.
Gift Nifty at 22,440 signals a gap-down opening of 200 points for Nifty.
Analysts expect volatility to continue even as the market pins hopes on the RBI monetary policy outcome to usher in buying. Market experts believe value buying to emerge at lower levels, as Indian stocks now turn attractive.
Besides, Tata Consultancy Services will set the tone for IT stocks, as it declares its Q4 results today
Analysts expect TCS is likely to post muted revenue and profit growth in the fourth quarter of the financial year 2025 (FY25) due to seasonality factors and a slowdown in key projects. Any positive surprise or optimistic outlook comments will help IT stocks.
Meanwhile, experts anticipate a rate cut from RBI.
Ajay Garg, CEO, SMC Global Securities Ltd, said: “RBI last cut the repo rate by 25 basis points to 6.25% in February 2025, driven by dropping inflation and to stimulate economic growth. India’s CPI inflation fell to 3.61% in February 2025 and is lower than the RBI’s tolerance target of 4%. Food inflation has also dropped 3.75% in February 2025 from 5.97% in January 2025. RBI has already infused durable liquidity of around ₹6.5 trillion by cutting the CRR, open market operations (OMO), and foreign currency swaps. With lowering inflation, the rate cut consideration by the RBI seems fruitful,” he added.
However, analysts are advising investors to accumulate quality stocks on dips.
Mandar Bhojane, Research Analyst, Choice Broking, said: With a 4.4% recovery from the recent swing low in just two sessions, along with good volume, the recent pull-back indicates renewed buying interest. “Going forward, traders should watch for sustained moves above resistance zones and use dips near supports as fresh entry opportunities. Overall, the short-term market outlook remains positive with cautious optimism,” he said.
Pratish Krishnan, Fund Manager & Senior Analyst, Baroda BNP Paribas Mutual Fund, said: Given tariffs are likely to impact manufacturing activity, banking and financial services, which has a large exposure to Indian IT services companies, could be resilient in these tough times.
“Finally, we are in the midst of a technological investment cycle led by shift to cloud and adoption of Artificial Intelligence (AI). AI spending is likely to be mainstream in the next 2-3 years, which could drive demand for IT services companies,” he said adding that “Post recent correction, valuations are now in line with five-year averages. Yields have turned healthy for the sector. While sector valuations, post recent corrections have turned attractive, concerns on US macro need to recede to be constructive on the sector.”
Ajit Mishra – SVP, Research, Religare Broking Ltd, said: Participants are advised not to read too much into this single-day recovery, as tariff-related developments are likely to keep volatility elevated. Moreover, the upcoming outcome of the MPC’s monetary policy meeting could add to the market swings, especially on the weekly expiry day. We recommend maintaining a hedged approach, focusing on stocks showing relatively higher strength.”
Published on April 9, 2025
