New Delhi: Market analysts anticipate a period of consolidation in the near future as investors pivot their attention towards the fourth-quarter earnings season.
Vinod Nair, Head of Research at Geojit Financial Services, remarked, “We anticipate a consolidation in the near term, prompting investors to seek shelter in bonds and gold.”
He further noted that the forthcoming US Federal Reserve policy announcements and US nonfarm payroll data will wield significant influence on the global market trajectory, while ongoing fourth-quarter earnings releases are poised to shape dynamics within the domestic market.
Nair highlighted that recent relief from tensions in the Middle East, coupled with a correction in oil prices, alongside an improved Indian economic outlook buoyed by robust composite Purchasing Managers’ Index (PMI) data from the manufacturing and service sectors, contributed to a market upsurge.
However, he cautioned that an unforeseen decline in US GDP coupled with a surge in the US core Personal Consumption Expenditures (PCE) price index precipitated a downturn across global stock markets on the last trading day.
Nair further observed, “The domestic market trailed its Asian counterparts as fourth-quarter earnings remained largely subdued. Weak results from the IT sector and a few underperforming index heavyweights contributed to this trend. Expectations of enhanced asset quality and the Reserve Bank of India’s regulatory measures for private banks spurred outperformance among PSU banks.”
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, remarked on the short-term outlook for the Nifty, noting a reversal in trend following a notable rise from recent lows. He identified immediate support at 22,300 levels, with potential for further declines should weakness persist below this threshold. Additionally, Shetti highlighted immediate resistance at 22,625 levels.
