Domestic markets are likely to see a flat opening on Thursday amid mixed global cues following US Fed’s status-quo stance on rates. Despite repeated calls for lowering interest rates by the US President Donald Trump, the US Fed maintained their stance but indicated there are two more rate cuts possible this year.
Gift Nifty at 24,810 signals a flattish opening for Nifty with marginal decline.
“Uncertainty about the economic outlook has diminished but remains elevated. The Committee is attentive to the risks to both sides of its dual mandate,” US Fed committee said. “For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policies,” US Fed chairman Jerome Powell said.
In reaction to Fed policy decision, Asian stocks are largely down in early deal on Wednesday even as US stocks closed mixed overnight.
Meanwhile, analysts expect the consolidation phase to continue in domestic market with a bout of volatility. Given the stiff valuation, especially in the mid and small-cap space, analysts expect the funds gravitating towards large-caps.
Market corrections often present opportunities in strong but temporarily mispriced companies, said Amit Jain, Co-Founder of Ashika Global Family Office Services. India’s 2025 YTD underperformance follows years of outperformance, and the current phase reflects a healthy reset, especially in mid- and small-caps. India’s structural strengths — GDP growth, macro stability, and domestic demand — remain intact, he said. Sectors like Auto, IT, and Real Estate face pressures, but quality names remain attractive for long-term investors, he said adding that “With DIIs deploying over ₹3 trillion, domestic flows now anchor market direction, reducing reliance on foreign capital”.
Vinay Paharia, CIO, PGIM India Mutual Fund, said: Geopolitical tension, trade negotiations and uncertainty in global macro environment continues to keep market under radar. “We continue to focus on domestic demand oriented sectors rather than those dependent on exports in terms of portfolio construction. While we expect tariff related uncertainties to continue, we reckon India is well placed in the situation given its lower reliance on good exports vis-à-vis competing countries and possibly gain in the event of shifting of supply chain from China in the longer term,” he said.
“The market has rebounded notably over the last two months, completely reversing its YTD decline and we are seeing some signs of exuberance in certain segments of the market. We reckon it is pertinent to stick to growth and quality mantra of investing while not overpaying for the same,” he further said.