(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
- TCS earnings
- Aviation boom
- Nifty in 2025
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Nifty futures suggest a lackluster start to Thursday’s session, with the downtrend in Asian markets unlikely to boost sentiment. Also, there are signs of small investors losing steam, which adds to the gloom as foreign investors remain net sellers of local shares. The third-quarter results season, which begins today, will be a critical test for the market to sustain its rich valuations.
TCS to kickoff results season after two rough quarters
Tata Consultancy Services will kick off earnings season today, with the company expected to report a 7% year-on-year growth in both revenue and net income. However, what investors will closely watch is the commentary regarding its future outlook. According to Bloomberg Intelligence analyst Anurag Rana, the IT giant is unlikely to offer any meaningful change in perspective over customers’ muted tech spending. This earnings season is crucial for the stock following back-to-back disappointing quarters that triggered a selloff in its shares.
Air travel demand set to take-off
Demand for air travel is set to pick up from fiscal year starting April 1, driven by the addition of new airports in Delhi and Mumbai. Adding to the revival is the return of Indigo’s Pratt & Whitney engine-fitted aircrafts, along with terminal expansions in Bengaluru, Chennai, Ahmedabad and Kolkata, according to a note by Elara. Indigo is set to benefit from these tailwinds, with the carrier and SpiceJet set to report a combined profit of about 50 billion rupees in the third quarter — up significantly from about 28 billion in the year-ago period, the brokerage said.
Citi, Morgan Stanley sees another year of gains
Foreign brokerages Citigroup and Morgan Stanley seem as optimistic, if not more, than local analysts regarding India’s equity market. Citi forecasts a decent 10% gain for the Nifty 50 index, while Morgan predicts an 18% jump in the BSE Sensex. They expect policy support early this year to bolster the economy, counter growth headwinds, and boost corporate earnings. Additionally, the analysts believe the dip-buying strategy employed by domestic investors to continue to provide downside protection to the market.
Analyst actions:
- JNK India Rated New Buy at LKP Shares; PT 815 rupees
- Lupin Rated New Buy at William O’Neil
- Waaree Energies Rated New Sell at Kotak Securities
Three great reads from Bloomberg today:
- Deepening India Slowdown Sinks Hope for New Era of 8% Growth
- Japan’s base pay rises most in 32 years, helping rate hike path
- Big Take: Analyst salaries sink 30% as Wall Street slashes equity research
And, finally..
The cost of hedging foreign-exchange risk in Indian assets has climbed to its highest level in more than two years, as speculation mounts that authorities might be easing their iron grip on the rupee. The three-month offshore forward points for the dollar-rupee — essentially the cost of locking in forward dollar purchases — are now hovering close to their peak since November 2022, a level that was hit just last week.
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--With assistance from Kartik Goyal, Ashutosh Joshi, Bhaskar Dutta, Malavika Kaur Makol and Chiranjivi Chakraborty.
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