The Nifty 50 index has bounced back this week even as the Indian rupee surged and the risks to the economy rose. The index soared to a high of ₹23,778, its highest swing since January and higher than the year-to-date low of ₹21,988. This report explores why Indian stocks are bouncing back.
Indian companies could be hurt by US tariffs and slowdown
There are signs that Indian companies will be affected by the happenings in the United States. For example, IT consulting firms like Infosys, Wipro, and Tata Consultancy Services have retreated as they reel from the ongoing government spending cuts in the United States.
Elon Musk is aiming to cut government spending by $1 trillion in the next few months. One of the low-hanging fruits has been to cancel contracts with companies that provide IT consultancy to the government.
The other major catalyst that may hurt Nifty 50 companies is the upcoming reciprocal tariffs by Donald Trump. While India has pledged to slash some of its tariffs, there is a risk that Trump will not buy it. That’s because the US maintains a $50 billion trade deficit with India, which he sees as being problematic.
At the same time, Indian exporters will be hurt by the soaring Indian rupee, which has jumped by over 5% in the past few weeks. An expensive local currency makes goods more expensive to importers.
On the positive side, there are hopes that the Reserve Bank of India (RBI) will implement more interest rate cuts later this year. Stocks benefit from low interest rates by making returns in the fixed incom lower.
Top Nifty 50 index stocks in 2025
Many companies in the Nifty 50 index are doing well this year. The best performers are Bajaj Finance and Bajaj Finserv, whose shares have surged by 38% and 28%, respectively. These companies have done well as their revenue and demand surges.
Kotak Mahindra’s stock price has soared by 21% this year as its private banking division, which caters to the wealthy, booms. Data shows that it added 2,280 new families in the last 12 months, much higher than the 711 that it added a year earlier. This growth means that it now provides wealth solutions to about 60% of all Indian wealthiest families.
Kotak’s private bank’s clients must have at least $1 million in investable assets, with most of its customers having a net worth of over $30 million. However, the wealth management industry is now contending with competition from companies like UBS, HSBC, Julius Baer, and Standard Chartered.
The other top companies in the Nifty 50 index are firms like JSW Steel, Shriram Finance, Hindalco Industries, Tata Steel, Eicher Motors, and Tata Consumer.
On the other hand, IndusInd Bank stock has crashed by over 32% this year, making it the top laggard. The company has dropped because of the substantial bad loans tied to its cooperatives business. Other top laggards are firms like Trent, Dr. Reddy’s, HCL Technologies, Infosys, and Wipro.
Nifty 50 index analysis
The recent Nifty index rebound is part of our recent forecast. In that report, we noted that the index was forming a bullish flag pattern, which is characterized by a tall vertical line and a flag-like pattern. The flag section also has a close resemblance to a falling wedge, a popular bullish pattern.
Therefore, the Nifty 50 index will likely have a strong bullish breakout, with the next key level to watch being at ₹26,300, up by almost 12% from the current level. A drop below the support at ₹22,000 will invalidate the bullish outlook.
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