Markets await Trump’s Liberation Day policy announcements

Axis Securities said, “We believe that at the current juncture, the risk-reward balance favours domestic-facing sectors due to the nil to low impact of the reciprocal tax. Export-oriented sectors will be in a wait-and-watch mode, based on the impact and development related to the reciprocal tax.” Gift Nifty at 23,310 signals a marginal loss at the opening for Indian stocks. Global stocks are trading flat in early deals on Wednesday.

According to the domestic brokerage, macroeconomic risks like Trade policy uncertainty, Global growth rate, and the US 10-year bond yields and dollar index will continue to challenge the market direction and market multiple. “Keeping this in perspective, the market needs to sail through another couple of months smoothly before entering into a concrete direction of growth. We expect near-term consolidation in the market, with breadth likely to remain narrow in the immediate term. Hence, the focus remains on style and sector rotation along with the earnings recovery,” it said.

The key domestic events that will further shape the direction of the Indian market going forward are: Decision of RBI MPC during the second week of Apr’25 and Q4FY25 earnings season, where the key monitorable will be the guidance on margins and growth for FY26, it further said.

The market is at a crucial juncture, said technical analysts.

Rajesh Bhosale, Equity Technical Analyst, Angel One, said: “Looking back at March’s bullish candle, we had advocated a buy-on-dip approach, making the mentioned support levels critical. For bullish momentum to regain strength, Nifty must close above the 89 DEMA at 23350, followed by a break above today’s high near 23600. Traders should monitor these levels closely and plan their trades accordingly. Given the ongoing geopolitical uncertainties and the likelihood of volatile swings, it is advisable to remain cautious, avoid complacency, and limit overnight exposure.

According to Axis Securities, Nifty is currently trading at 19x on 12m fwd earnings, slightly above its 5-year average of 18.8x. Nonetheless, valuations appear attractive for the Large-caps vs. the broader market, where the margin of safety is still missing. “Against this backdrop, we believe that the large cap stocks, ‘quality’ stocks, monopolies, market leaders in their respective domains, and domestically focused sectors and stocks may outperform the market in the near term.” it added. “Against this backdrop, we continue to like and overweight Largecap private banks, Telecom, Consumption, Hospitals, and Interest-rate proxies,” it further said. 

According to Axis Securities, following the recent price correction and based on the growth visibility in the domestic market for FY26, we prefer certain Capex-oriented plays that look attractive at the current juncture. 3) We downgrade the IT sector, as we foresee a slowdown in overall IT spending in the US market, and a probable delay in discretionary spending may pose a downgrade risk in upcoming quarters. These downgrade risks could pose a challenge to the valuation of the IT sector in the near term.