Nifty 50 at Crucial 24,000 Support Level; India's Market Position in Focus

1 min read     Updated on 18 Aug 2025, 09:29 AM
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Reviewed by
Shriram ShekharBy ScanX News Team
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Overview

The Nifty 50 is testing a crucial support level at 24,000-24,043, defined by the 200-day moving average and the upper boundary of a February-April double-bottom pattern. CLSA analyst Laurence Balanco suggests a potential upside to 26,333 if this support holds. However, India is underperforming compared to broader emerging markets and China. The India ETF to China ETF ratio has broken down from a double-top pattern, indicating a possible 8-13% additional downside. Factors influencing capital flows include China's economic recovery and broader emerging market dynamics.

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*this image is generated using AI for illustrative purposes only.

The Nifty 50, India's benchmark stock index, is currently hovering near a critical support level, drawing attention from market analysts and investors alike. The index is testing the 24,000-24,043 range, which is significant for multiple technical reasons.

Technical Analysis Insights

According to CLSA's technical analyst Laurence Balanco, this support zone is defined by two key technical indicators:

  1. The 200-day moving average
  2. The upper boundary of a February-April double-bottom pattern

Balanco suggests that if the Nifty 50 manages to hold above this crucial support, it could potentially trigger upside momentum. The analyst has set a target of 26,333 for the index, contingent on maintaining this support level.

India's Market Performance in Global Context

While the Nifty 50's technical setup presents a potentially bullish scenario, a broader perspective reveals some challenges for Indian markets:

  • India is currently underperforming relative to broader emerging markets and China.
  • The ratio of India ETF to Emerging Markets ETF has shifted into a higher trading range since the post-COVID rerating.
  • The India ETF to China ETF ratio has broken down from a double-top pattern.

Potential Downside and Historical Context

The breakdown in the India-China ETF ratio suggests there might be further room for adjustment:

  • Analysts estimate a potential 8.00-13.00% additional downside in this ratio.
  • This breakdown aligns with relative support levels observed in 2022 and 2023.

Factors Influencing Capital Flows

Market observers are keeping a close eye on two key factors that could impact capital flows in the near term:

  1. China's economic recovery
  2. Broader dynamics in emerging markets

These elements are expected to play a crucial role in determining the direction of investment flows, potentially affecting India's relative market performance.

Conclusion

As the Nifty 50 tests this critical support level, investors and analysts are closely monitoring both domestic technical indicators and global market dynamics. The index's ability to hold above the 24,000-24,043 range could be pivotal for short-term market sentiment, while India's relative performance against other emerging markets, particularly China, remains a key focus for international investors.

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Nifty 50 Q1 Earnings Show Muted Growth, Recovery Unlikely in Q2

1 min read     Updated on 11 Aug 2025, 05:19 PM
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Reviewed by
Shriram ShekharBy ScanX News Team
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Overview

Nifty 50 companies reported largely in-line earnings for Q1, with growth expected in mid-single digits. Key trends include weakness in consumption, muted IT services demand, and weak loan growth in banking. Most companies reported muted earnings or fell below estimates, with State Bank of India being a standout performer. The Q2 outlook remains pessimistic due to insufficient job creation and inadequate private investment. IT sector faces ongoing challenges, while consumer durables and auto companies are under pressure. Lower food prices may benefit urban growth, but the rural economy is expected to face continued challenges. Analysts anticipate further cuts in consensus earnings estimates for Nifty 50 companies.

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*this image is generated using AI for illustrative purposes only.

The Nifty 50, India's benchmark stock index, has reported largely in-line earnings for the June quarter, with growth expected to reach mid-single digits, according to a recent analysis by Kotak Institutional Securities. The earnings season has unveiled several key trends that paint a picture of the current economic landscape.

Key Findings

  • Consumption Weakness: The earnings reports indicate a continued weakness in consumption across sectors.
  • IT Services: Demand for IT services remains muted, reflecting global economic uncertainties.
  • Banking Sector: Banks are experiencing weak loan growth, signaling potential economic headwinds.

Expert Insights

Sanjeev Prasad from Kotak Institutional Equities provided valuable insights into the earnings season:

  • Most companies reported muted earnings or fell below estimates.
  • State Bank of India emerged as the standout performer, delivering the biggest positive surprise.

Q2 Outlook

The outlook for the July-September quarter remains pessimistic. Kotak Institutional Equities does not anticipate a recovery in the near term, citing several factors:

  • Insufficient job creation in the manufacturing sector
  • Inadequate private investment despite income tax cuts

Sector-Specific Challenges

IT Sector

  • Facing ongoing challenges with growth and margins
  • Weak discretionary spending impacting performance

Consumer Durables and Auto Companies

  • Under pressure, likely due to subdued consumer sentiment

Economic Indicators

  • Food Prices: Lower food prices may benefit urban growth
  • Rural Economy: Expected to face continued challenges despite food price trends

Future Projections

Given the current economic landscape, analysts anticipate further cuts in consensus earnings estimates for Nifty 50 companies.

The muted performance of Nifty 50 companies in Q1 and the pessimistic outlook for Q2 underscore the complex challenges facing the Indian economy. As various sectors grapple with specific headwinds, from weak consumption to muted IT demand, the market will be closely watching for signs of recovery in the coming months.

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