Nifty at 25,000: Opportunity or trap for investors? Kranthi Bathini explains

Global cues, IT momentum, banking consolidation, and domestic triggers such as GST 2.0 are all shaping market sentiment right now. In this exclusive conversation, Kranthi Bathini, Equity Strategist at WealthMills Securities, shares his outlook on Fed rate cuts, sectoral trends, investor strategies, and the crucial Nifty levels to watch.

Excerpts:
Q. Fed Chair Jerome Powell has hinted at a possible rate cut next month, lifting Asian markets. How significant could this be for India, especially in terms of foreign inflows?
Kranthi Bathini: A Fed rate cut has been widely anticipated, and the pressure on Powell is intense, even coming from the US President. The mere indication of a cut has already cheered global markets, including Asia. For India, every dip below 25,000 on the Nifty has seen a strong pullback. Sustaining above this level would be a clear positive signal.


The logic behind a rate cut is mixed; On one hand, US inflation is cooling, but on the other, tariffs are pushing up household costs, and growth prospects remain uncertain. Despite this dichotomy, rate cuts are always positive for equities and consumption. For India, if the Fed begins cutting, it could eventually influence RBI’s policy stance too. Overall, it’s a welcome move for global and Indian markets.

Q. Reliance and IT stocks drove Monday's gains. Can IT sustain leadership given global tech demand and currency trends?
Bathini: In the near term, I don’t see a sustainable IT rally. The sector is showing a pattern of lower highs and lower lows. We see value in buying on dips due to the strength of their business models, but rallies tend to face profit booking. This trend may continue for the next couple of quarters until there’s clarity on US IT budgets and growth outlook.

For long-term investors (2–3 years), however, Indian IT remains resilient. Buying large and midcap IT stocks on dips in a staggered manner makes sense, but in the short term, IT is best avoided.

Q. Recently, we saw IT and metals outperform while banks lagged. Do you expect this sectoral rotation to continue, or will financials reclaim leadership?
Bathini: Sectoral rotation has become a weekly feature. Largecap rallies are not sustaining, new highs are often sold into. That’s why markets have been stuck in a 1,000-point range on the Nifty (24,500–25,500) for the last six months. The real action is in stock-specific stories and the strong pipeline of new IPOs, rather than broad sector moves.

Q. ICICI Bank was among the top losers during Monday's session. Should investors be cautious of private banks, or is this just short-term profit booking?
Bathini: Banks remain central to FPI portfolios. But FPIs have been exiting India in recent months, triggering consolidation in banking stocks, while domestic institutional investors (DIIs) have cushioned the fall. Once FPIs return, banking could see a sustained rally.

For medium- to long-term investors, both largecap public and private banks remain attractive. Short-term consolidation is largely due to the pause in India’s rate cut cycle.

Q. Apart from Fed policy, what domestic factors could affect market sentiment in September?
Bathini: Domestically, GST 2.0 reforms are the biggest trigger. Post-Independence Day announcements, there’s anticipation around changes in GST slabs, which could boost consumption and auto sectors. In addition, upcoming IIP and GDP data will influence sentiment. On the risk side, tariff announcements remain a key concern, keeping markets cautious.

Q. Given the mixed trends, what would be the ideal investment strategy right now?
Bathini: Time horizon is crucial. For those with a 1–3 year view, buying on dips is the best approach, ideally through a staggered strategy or SIP-style investing. Investors must also keep cash ready to add during declines.

This isn’t a “buy and forget” market. Booking profits on sharp rallies makes sense, because stocks often climb and then fall back quickly. Flexibility, staggered buying, and disciplined profit-taking should define strategy in the current choppy environment.

Q. Outlook on Nifty levels for this week?
Bathini: The key level to watch is 25,000. Sustaining above it will set a positive tone. A move above 25,200 could trigger further upside. On the downside, 24,750 is the immediate support, and 24,000 is the critical level not to breach.

In short, staying above 25,000 is crucial. Any global or geopolitical dip should be seen as a buying opportunity for long-term investors.

Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.