Stock markets are expected to open flat to positive amid positive global signs. Stock markets ended significantly higher on Monday despite weak GDP figures. Analysts expect the positive momentum to continue at least until the Reserve Bank of India’s (RBI) monetary policy results on Friday.
Following the announcement of the lowest GDP growth in the last seven quarters, all eyes are on the RBI’s MPC policy to be announced this Friday. India’s GDP growth in the second quarter of 2024-25 slowed significantly to 5.4%, lower than expected, reflecting weaker manufacturing, consumption and private investment. GVA increased moderately at 5.6%, while manufacturing declined to 2.2%. However, agriculture provided some relief, rising by 3.5% due to a good monsoon.
“The pressure is mounting given the weaker-than-expected GDP statistics for two consecutive quarters,” said Harsimran Sahni, executive vice president and head of finance at Anand Rati Global Finance. However, there was also a sharp rise in inflation data (both CPI and core CPI). While the rise in inflation is likely to be a seasonal pattern, Governor Das has consistently emphasized that inflation can pose a threat to the economy if left unchecked. Nevertheless, we understand the significance of the much lower than expected GDP data. Therefore, the chance of a rate cut in December policy is about as likely as flipping a coin. ”
Gift Nifty suggests flat start at 24,435
According to Motilal Oswal Financial, the Indian stock market corrected around 8% from its peak from September to November 2024 due to various factors. This is due to global factors such as the weak geopolitical backdrop in West Asia and the rise in the dollar index following Trump’s victory, as well as subdued returns and higher valuations in mid- and small-cap stocks. FIIs sold approximately $13 billion worth of stocks between October and November 2024.
“The correction has dampened large-cap valuations even as mid- and small-cap stocks are trading at premium multiples. Nifty50 is currently trading at 19.5x FY26 EPS. The stock index has a one-year forward P/E ratio of 30x/24x, which is far from the highs of September 2024, but it is still rich compared to the company’s history. Compared to Nifty50. Our model portfolio “Reflects our belief in structural and cyclical themes in the country,” the domestic brokerage said, adding that it is overweight in IT, healthcare, BFSI, consumer staples, industrials and real estate. . We are metals, energy and automotive experts.
Meanwhile, most stocks in the Asia-Pacific region rose in early trading on Tuesday.
