The RBI’s aggressive stance signals a broader intent to support growth amid easing inflation. Yet, markets may consolidate near this range in the short term as traders assess whether the rally has legs or was a knee-jerk reaction.
For sustainability, upcoming macro data and corporate earnings will be key. Watch for consistent institutional flows and sector rotation to confirm if this breakout holds.
Q: What are key levels for Nifty and Bank Nifty, this week? As Indian equity markets ride the momentum of the RBI’s surprise 50 basis point rate cut and a broad-based rally in financials, traders are closely watching the next technical levels for both the Nifty and Bank Nifty indices. The Nifty index has decisively surpassed the psychologically important 25,000 mark, reflecting renewed investor confidence and robust buying interest across sectors. Immediate resistance is now seen at 25,100. A sustained move above this level could open the way to the next resistance zone at 25,200–25,250, with a further upside target at 25,500 if the current bullish momentum continues.On the downside, Nifty’s immediate support lies in the 24,850–24,800 zone, which is particularly crucial as it serves as a trend-decider for the index. If this support band fails to hold, the index could retreat towards 24,500, a key support level for the week
Bank Nifty has surged to an all-time high, the index is now trading in uncharted territory, with the next major resistance at the psychologically significant 57,000 mark.
A decisive breakout above this level could see Bank Nifty advance towards the 57,400–57,500 zone, where daily pivot resistance and psychological barriers may come into play.
On the support side, Bank Nifty’s immediate cushion lies at 56,000. If breached, the index could see further declines to 55,500 and 55,400, which are the next critical support levels to watch. Notably, the 20-day Simple Moving Average (SMA) also coincides with this support region, making it an essential level for short-term traders and investors to monitor.
Q: Interest rate sensitive sectors banks, auto and realty welcomed the move and saw significant rallies. Do you think it will go a long way in improving Q2 earnings of these sectors and re-rate them?Banks, auto, and realty stocks rallied sharply after the rate cut, with some gaining over 2–5% intraday. Lower borrowing costs improve credit growth, ease home loan EMIs, and drive auto affordability, setting the stage for stronger topline and margin expansion in Q2.
This policy action could offer real momentum for a re-rating, especially in real estate and affordable housing segments, where demand is closely tied to interest rates. Similarly, autos may benefit from stronger retail demand and improved financing. For banks, a pickup in loan demand and reduced cost of funds can aid both earnings and asset quality.
If macro stability continues and demand sustains, these sectors are likely to see positive earnings surprises and upward revisions in valuations.
Q4: While we have seen FII trends changing for the good over the past two months, the last fortnight witnessed a sell-off in banks and autos. Do you expect a meaningful participation of foreign investors in these sectors? After robust inflows in May, Foreign Institutional Investors (FIIs) turned net sellers in early June, offloading Rs 3,565 crore in equities so far. The narrow yield differential between US and Indian bonds and global uncertainties have contributed to this cautious stance. However, domestic institutional investors have offset much of this selling, keeping markets stable.
The RBI’s pro-growth policy and India’s resilient economic outlook could attract FIIs back, especially if the rally sustains and triggers short-covering. Regulatory changes, such as potential easing of foreign ownership rules in banks, may also encourage long-term FII participation. For now, FII activity remains mixed, and meaningful involvement will depend on sustained sectoral performance and global risk appetite.
Q: What is your assessment of the impact of the Trump-Musk spat on the US economy since Musk has called for the President’s impeachment and how should the IT sector investors take it? The public feud between Elon Musk and President Trump escalated after Musk called for Trump’s impeachment and warned that Trump’s new trade tariffs could trigger a US recession by late 2025. The spat led to a 14% plunge in Tesla’s stock, erasing over $150 billion in market value, and rattled broader market sentiment, though the direct impact on the overall US economy remains limited.
For Indian IT sector investors, the episode underscores the risks of heightened US policy uncertainty and a potential slowdown in US economic activity, which could affect tech spending and outsourcing demand. While the immediate fallout is concentrated in Tesla and related stocks, investors should monitor US macro developments and corporate sentiment closely, as any US recession or policy volatility could have a knock-on effect on Indian IT exports.
Q: There were some big winners this week like Cochin Shipyard, Brainbees and Sobha while MMTC, Suzlon and Waaree were among the worst losers. What should investors do with them along with Raymond post the carving out of the realty business?We can answer this by checking factor scores for these stocks using our Share.Market-powered research, which evaluates them across five key factors: Momentum, Value, Sentiment, Volatility, and Quality.
Each stock is scored out of 5 on these factors, helping investors assess price trends, fair valuation, market perception, risk levels, and financial strength. By using these insights, investors can make informed decisions and identify strong opportunities in the current market.
Cochin Shipyard : Factor Analysis Snapshot
Momentum: 5/5 – Strong OutperformerCochin Shipyard is demonstrating robust momentum, significantly outperforming the market in recent sessions. The stock has delivered impressive returns, including a 22.88% gain in the past week, reflecting continued investor interest and positive price action.Value: 1/5 – Very ExpensiveThe stock appears highly overvalued relative to its fundamentals, with a Price-to-Earnings (PE) ratio of 74.75 and a Price-to-Book (PB) ratio of 11.09—both well above sector averages. This suggests investors are paying a premium for its growth prospects.Quality: 4/5 – Good QualityCochin Shipyard maintains solid financial health, with a strong return on equity and consistent profitability. The company has a low debt-to-equity ratio and has reported positive results for the last several quarters, underscoring its operational strength.Volatility: 3/5 – Slight Price FluctuationThe stock exhibits moderate price fluctuations, suggesting relatively moderate risk or moderate price stabilityBrainbees Solutions Ltd. (FirstCry): Factor Analysis SnapshotMomentum: 1/5 – Huge UnderperformerBrainbees Solutions Ltd. (FirstCry) is currently showing very weak momentum, significantly underperforming compared to its sector peers. Despite a minor daily gain, the stock has struggled to deliver positive returns over recent periods.Value: 1/5 – Very ExpensiveThe stock is considered highly overvalued based on its valuation metrics. Investors are paying a premium that is not justified by the company’s recent performance, making it unattractive from a value perspective.Quality: 4/5 – Good QualityOn a positive note, Brainbees Solutions demonstrates strong business fundamentals. The company maintains good operational quality and financial health, which is reflected in its high quality score.Sentiment: 1/5 – Analysts Are Very BearishMarket sentiment and analyst outlook remain very negative. Most analysts are bearish on the stock’s near-term prospects, indicating a lack of confidence in a potential turnaround.Sobha (SOBHA): Stock Analysis SnapshotMomentum: 3/5 – Market-Like PerformerSobha Ltd. has demonstrated moderate momentum, performing in line with the broader market. Value: 1/5 – Very ExpensiveThe stock is currently considered very expensive based on its valuation metrics. Investors are paying a significant premium, which may limit further upside unless earnings growth accelerates.Quality: 4/5 – Good QualitySobha Ltd. stands out for its strong business fundamentals and operational efficiency. The company’s quality score reflects consistent financial performance and sound management practices.Volatility: 5/5 – Low Price FluctuationThe stock exhibits high price fluctuations, suggesting relatively higher risk or price instabilitySentiment: 5/5 – Analysts Are Very BullishMarket sentiment is highly positive, with analysts expressing strong bullish views on Sobha Ltd. This optimism is likely driven by the company’s quality and recent price performance.MMTC: Stock Analysis SnapshotMomentum: 2/5 – UnderperformerMMTC Ltd. is currently showing weak momentum, and underperforming its sector. Quality: 5/5 – Excellent QualityDespite recent financial setbacks, MMTC is rated highly on quality, reflecting strong fundamentals in certain areas and operational resilience. The company remains a significant player in its sector, though it has struggled with declining revenues and profits in recent quarters.Volatility: 2/5 – High Price FluctuationThe stock exhibits high price fluctuations, suggesting relatively higher risk or instabilitySuzlon: Stock Analysis SnapshotMomentum: 3/5 – Market-Like PerformerSuzlon Energy Ltd. is showing momentum in line with the broader market. Value: 3/5 – Fairly ValuedThe stock is considered fairly valued at current levels. While Suzlon’s P/E ratio (around 43–59) is higher than the sector average, recent earnings growth and improved profitability help justify its valuation. Investors are neither paying a steep premium nor getting a deep discount.Quality: 5/5 – Excellent QualitySuzlon stands out for its strong financial turnaround and robust order book. The company has demonstrated operational efficiency and consistent earnings improvement, positioning it as a high-quality pick in the renewable energy sector.Volatility: 4/5 – Low Price FluctuationThe stock exhibits Low price fluctuations, suggesting relatively lower risk or stability in priceSentiment: 5/5 – Analysts Are Very BullishMarket sentiment is highly positive, with analysts expressing strong confidence in Suzlon’s future prospects. Raymond: Stock Analysis SnapshotMomentum: 4/5 – OutperformerRaymond Ltd. has shown strong momentum, outperforming its sector in recent weeks.
Value: 5/5 – Highly UndervaluedThe stock is rated as highly undervalued in the factor analysis, The current price-to-book ratio is also low compared to sector peers, further supporting its undervalued status.
Quality: 4/5 – Good QualityRaymond demonstrates strong business fundamentals, with consistent profit and revenue growth. The company maintains a healthy return on equity and a manageable debt-to-equity ratio, indicating sound financial management.
Volatility: 3/5 – Slight Price FluctuationThe stock exhibits Moderate price fluctuations, suggesting relatively moderate risk or moderate price stability
(Share.Market Disclaimer: Investments in securities are subject to market risks. Read all the related documents carefully before investing. All investors are advised to conduct their own independent research into investment strategies before making an investment decision. Past performance does not guarantee future returns.)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
