Gift Nifty indicates flat opening amid weak Asian markets

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Domestic markets are expected to continue their rally, thanks to the information technology (IT) sector. After IT major Infosys came out with stellar numbers for Q1 of FY25 and raised its full-year guidance, analysts expect Nifty to cross the 25,000-mark sooner than later. However, Gift Nifty futures at 24,830 indicates a flattish opening.

The Infosys ADR surged over 8 per cent at the NYSE overnight following its strong results. Analysts turned bullish on the stock.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said: Infosys has had an excellent start to FY25 with strong and broad-based growth, operating margin expansion, robust large deals, and the highest ever cash generation. “Overall, we believe the worst is behind us and we may see a revival in the IT sector from the Q1 earnings looking at the TCS and Indy performance,” he added.

Amit Goel, Co-Founder & Chief Global Strategist, Pace 360, said: Infosys, India’s second-largest IT company’s consolidated revenue from operations for the April-June quarter rose by 3.6% QoQ to ₹39,315 crore from ₹37,923 crore. Net profit fell by 20 per cent QoQ to ₹6,374 crore from ₹7,975 crore. 

“The stock has gone up by 24% during the previous three-months (from ₹1,420 to ₹1,760), while the Nifty IT index rose 19.50% in the same timeframe. We expect Infosys to remain positive post-results, with an expected range of ₹1,800-1,850,” he further said.

Meanwhile, Asian stocks are largely down, trackng overnight weakness in the US stocks.

Analysts expect the domestic markets to face some resistance, given the sharp run-up in prices.

Sameet Chavan, Head Research, Technical and Derivative – Angel One, said: “All the key technical indicators are placed in the extreme overbought territory, and with few moving averages deviating far away from prices, the ongoing gravity defying rally looks unreal. Hence, we advise short-term traders to take some money off the table and avoid aggressive bets for a while.”

According to Chandan Taparia, Senior Vice-President of equity derivatives & technicals, broking & distribution at Motilal Oswal Financial Services Ltd, India VIX has been moving between 12 and 15 in the last 25 trading sessions. “Stable volatility is supporting the overall bullish stance of the market. Option data suggests a broader trading range between 24400 and 25200, with an immediate range between 24600 to 25000 levels. However, ahead of the Union Budget, volatility may spike, but the overall bullish stance rules out a change in market set-up,” he added.