Dated: 02/05/2025
It has been indecisive week where broader markets were unclear as to when the India-Pak war may begin will it be overnight or into the broad day light & Nifty continued to face hurdle from the levels of 24500 which were indeed as per our expectations & was wildly mentioned in our earlier weekly edition of “MODI TO BUTCHER PAKISTAN THIS TIME FOR GOOD NIFTY TO FACE IMMEDIATE HURDLE AT 24500” last week.
Bulls tried hard to pull off the skin above 24500 in Nifty but bears & fears (Fear of India-Pak War) defied the skies & pulled back to near the neutral consolidation levels of 24350. It has been more than a week where whole India is waiting for the justice of brutal killing of innocent Indian Hindu tourists in Pahalgam Kashmir but we can only wait for the justice to happen let’s see how long.
Furthermore India-US tariff talks underwent smoothly following cool off in metals like Gold & Silver while Brent Crude & DXY remained cooled on the lower levels which ultimately resulted in Nifty to hit another upside towards 24589.15 kind of levels.
However, Indian domestic markets may not get any major setback even due to ongoing war news as India now has major upper hand in the Geo-Political front followed by India-Pak war where we will easily win but a onetime knee jerk reaction could be a possibility where once the news breaks out of India-Pak actually entering into the war the possible downtown could be towards 23500-23800 while maximum major setback could be towards 23000 kind of levels while from those levels we can probably get to see the vertical upmove towards 25000 kind of levels.
Furthermore Nifty overall fell 17.25% from the ATH of 26277.35 to make a low of 21743.65 & from those lower levels Nifty has now recovered nearly 13%. This sharp upmove was clearly indicated by us over several articles in last 4-5 weeks. Though Nifty delivered the losing streak after almost 28years where consecutively 5 months negative close has happened but with finally its 6th & now 7th month where positive recovery was seen & Bull’s rejoices we now have hope for a smooth but gradual recovery into the broader markets in the coming weeks ahead to continue.
As we have mentioned with rising tensions on India-Pak war we may have a knee jerk reaction initially in the Nifty but with RBI’s intervention in the last 2 months largely into the Banking space with large OMO’s this sector has outperformed in the broader markets followed by the big recovery seen Rupee front where it recovered to make a high of 83.667 & decisively gave a close at 84.570 which jointly supported the Nifty’s upmove. Nifty as earlier anticipated tested initial levels of 24500 by making high’s of 24588.65 to give a close at 24346.70. However, the knee jerk reaction which we are expecting could take us towards the lower levels of 23500-23800 followed by any major reaction which could possibly give us 23000 kind of levels while from those levels a vertical upmove may come which could take the Nifty towards 25000 kind of levels. We have been mentioning since last 4-5 Weeks consecutively that FII’s are covering up their shorts in Index & Stock derivatives & were clearly seen reducing their selling quantum in Cash segment as well & since last week’s few sessions they have once again turned net buyer’s last week with finally after 5-6 months FII turned net buyer’s on March as well as in April series with net buying of Rs.2,735.02 cr. which resulted in strong comeback of Bull’s which can be clearly seen last week where the strong buying / pull back was ambiguously seen.
Once again though some ease up has been seen in the broader markets but the major hit which the portfolio has seen in last 5 months is still unmatched & still it has far long journey to recover from hereonwards. FII’s have now turned net buyer’s which not only in derivatives segment but also in Cash segment which took a turn in last few trading sessions.
The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:
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For the first time in last June 2024 Weeks Rupee recovered to 83.667 per Dollar gave a decisive close at 84.578
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RBI further announced OMO of Rs.1.25 Lac crore to boost banking sector
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Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99-100
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Brent Crude tested low’s of 58.40 but now recovering stable near 60-62$
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Gross GST collections rise to an all time high of Rs 2.4 Lac crore in April
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India and US are actively working upon a fresh FTA (Trade Deal) post 90 day reprieve
FII’s so far since October 2024 to till 2nd Week of March 2025 remained on the Net sell side with significant sell off & putting significant pressure on Indian domestic markets & had no as their relentless selling has been nonstop where since the beginning of the October 2024 month FII’s have done massive selling amounting to Rs. 3,19,016.03 crore combined of October, November, December, January, February, March & April 2025. On the contrary DII’s were the main supporters of the entire Indian domestic Equity Markets with whopping buying of Rs. 4,03,192.39 cr. since the beginning of October 2024 & in the Calendar year 2024 they have bought more than Rs. 5.26 Lacs cr. & Rs. 2.21 lac crore approx. so far in 2025.
However, Nifty has so far given 17.25% correction from the top of 26277.35 with data turning positive we could finally assume the correction could finally get over once in for all while Nifty has made another history of continuous negative closing of 5 months after 28yrs. On the other side FII’s net longs have now improved towards 40% almost which has improved significantly from @15-18% to nearly 47-48% & we have consistently been mentioning this to improve lastly which continuously signifies & has now possible bottom formation 21700-22000 which indeed has turned the game & bottom was formed in Nifty. Now we expect the FII’s long positions to rise towards 67% in the coming months ahead which may take Nifty & broader markets again on the higher levels.
In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:
Domestic News (Mainly consists of Union Budget 2025-26 Outcomes):
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For the first time in last June 2024 Weeks Rupee recovered to 83.667 per Dollar gave a decisive close at 84.578
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RBI further announced OMO of Rs.1.25 Lac crore to boost banking sector
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Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99-100
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Brent Crude tested low’s of 58.40 but now recovering stable near 60-62$
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Gross GST collections rise to an all time high of Rs 2.4 Lac crore in April
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India and US are actively working upon a fresh FTA (Trade Deal) post 90 day reprieve
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Reliance Industries: Jio -Q4 cons net profit 66.42B rupees vs 64.77B (QoQ)
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Jio-Q4 revenue 300.18B rupees vs 293.07B (QoQ)
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Jio-Q4 EBITDA 161.88B rupees vs 157.98B (QoQ) || Q4 EBITDA Margin 53.9% (YoY)
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Q4 Jio ARPU 206.2 rupees per subscriber/ Month
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India Industrial production (YoY) (Mar) Actual :3.0% vs 2.9% previous; EST 3.3%
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India cumulative industrial production (mar) previous 4% vs 4.10% previous
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India manufacturing output (MoM) (mar) previous 3% vs 2.9% previous
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In FY26, prospects of the agriculture sector remain bright, supported by healthy reservoir levels and robust crop production
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Merchandise exports may face pressure due to global uncertainties, services exports will likely maintain their resilience
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Risks from ongoing global trade disruptions warrant close monitoring
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Food inflation is expected to soften further
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Global uncertainties, like trade tensions and geopolitical risks, could disrupt supplies or cause prices to rise or both
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Uncertainties stemming from global developments a key risks for FY26 Growth outlook
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Indian economy can demonstrate resilient growth despite global uncertainties || Perception of prolonged uncertainty, more than trade, may cause private sector to put its capital formation plans on hold
- Trump says India is coming along great, I think we have a deal on tariffs
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Cabinet approves development of greenfield high-speed corridor of 166.80 km (NH-6) from mawlyngkhung (near shillong) in Meghalaya to panchayat (near silchar) in Assam on hybrid annuity mode (HAM) at a total cost of Rs 22,864 Cr
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Cabinet approves FRP of sugarcane for sugar season 2025-26 at Rs 355/QTL for basic recovery rate of 10.25%, providing premium of Rs 3.46/QTL for each 0.1% & reduction in FRP by 3.46/QTL for every 0.1 % decrease in recovery
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Nse launches Nifty waves index
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RBI working group recommendation to:Extend call money market timings to 7 PM
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Extending timings of market repo and trep trading hours till 4:00PM
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Settlement timings for repo transactions to be shifted to 5:30PM –6:30PM
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Maintaining trading timings of 9:00AM to 5:00PM for Govt securities
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Retaining current market hours for the foreign exchange markets
International news:
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UK-INDIA bilateral investment treaty will contain investor-state dispute settlement clause allowing companies to sue either government-sources-RTRS
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Reports : Japan has approached India to join the 6th-generation Global Combat Air Programme (GCAP) along with UK & Italy.
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For the first time in last June 2024 Weeks Rupee recovered to 83.667 per Dollar gave a decisive close at 84.578
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RBI further announced OMO of Rs.1.25 Lac crore to boost banking sector
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Continuous easing up of Dollar index & made low of 97.92 to now well settled near 99-100
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Brent Crude tested low’s of 58.40 but now recovering stable near 60-62$
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Brent Crude tested low’s of 58.40 but no stable near 66-68$
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India in talks with United States for mutually beneficial trade deal
In the institutional segment the FII’s net buyer’s with net inflow of Rs. 7,680.09 cr. & the DII’s were also buyer with net inflow of Rs. 9,269.47 cr. last week. FII’s have been brutal but history has shown whenever FII’s have shown merciless selling pressure we somehow make another bottom & we have now successfully formed a good bottom at 21700-22000 supported by DII’s massive buying as monthly retail SIP data remains near Rs.26,000 cr. p.m. almost stagnant.
Nifty last week made high’s of 24588.65 to give a close at 24346.70. Nifty not only managed to somehow retain the levels above 24000 mark but also hit high’s of 24588.65. Nifty as earlier anticipated tested initial levels of 24500 by making high’s of 24588.65 to give a close at 24346.70. However, the knee jerk reaction which we are expecting could take us towards the lower levels of 23500-23800 followed by any major reaction which could possibly give us 23000 kind of levels while from those levels a vertical upmove may come which could take the Nifty towards 25000 kind of levels. This time support could come from “IT Sector” followed by heavy weights like Reliance etc.
Sensex made high last week at 80661.31 to give a close at 80242.24. In the coming week ahead the Sensex now show knee jerk reaction towards 77300-77500 & from those levels we could get the see the another upside towards 81000-82000 kind of levels. This time support could come from “IT Sector” followed by heavy weights like Reliance etc.
This time Bank Nifty may remain on the back foot & may face immediate hurdle now at 56100 while immediate downside target looks like to remain at 52500-53000 kind of levels.
Meanwhile Nifty Financial Services may face hurdle now at 27000 kind of level while downside target now remains at 24000 kind of levels.
The “Nifty IT” has completed our immediate upside target of 35000-36000 kind of levels by making high’s of 36299.10 to give a close at 35891.85 where major heavy weights shown heavy buying from the low’s. Moving ahead “Nifty IT” if gives a sustainable move above 36000 then we may get 38000 kind of levels while crucial supports have shifted higher within the range of 32000-33000 kind of levels with major heavy weight like TCS Infosys & Wipro continued to remain into focus for the moves ahead.
As of February 2025 the number of Demat Accounts has declined to whopping 19cr. this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now remains almost stable at Rs. 26,000 cr. per month.
Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:
Nifty CMP: 24346.70
Nifty Potential Upside Target: 25000
Nifty Immediate Target / Support: 23500-23800 / 23000 (As the case may be)
Sensex CMP: 80242.24
Sensex Potential Upside Target: 81000-82000
Sensex Immediate Support: 77300-77500
Bank Nifty CMP: 55115.35
Bank Nifty Immediate Hurdle: 56100
Bank Nifty Immediate Target: 52500-53000
Nifty Financial CMP: 26209.25
Nifty Financial Immediate Hurdle: 27000
Nifty Financial Immediate Target: 24000
Nifty IT CMP: 35891.85
Nifty IT Potential Upside Target: 38000
Nifty IT Immediate Support: 32000-33000
Stock on Radar:
Large Caps:
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Wipro (CMP 243): This large-cap IT counter looks good to accumulate here at CMP 243 with strict SL placed at 220 for a potential upside towards 270-275 kind of levels till May 2025 end.
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Infosys (CMP 1507): This large-cap IT counter could outperform the sector but can be added on decline towards 1456 with strict SL placed at 1300 one can expect a potential upside towards 1620 in no time.
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ACC (CMP 1864): This large-cap reality counter looks like has almost completed its correction & can be added here at CMP 1864 with strict SL placed at 1700 one can expect a potential upside towards 2700 in next 6 months time frame.
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Bandhan Bank (CMP 161): This large-cap banking company has report rise in 482% in its QoQ profits & looks good to add on decline towards 152 with strict SL placed at 140 one can expect a potential upside towards 200 in 3months time frame.
About the Author:
Mr. Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 13+ years exploring in depth analysis of the Equity & Derivatives with accuracy of 90% and above.
He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.
Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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