After Friday’s crash, GIFT Nifty jumps on GDP data. How will the stock market react on Monday?

Indian markets ended Friday with a sharp decline, but late economic growth data has changed the mood in the short term. The BSE Sensex fell 961 points or 1.17% to close at 81,287. During the day, more than 1,000 points had fallen. In one session, investors lost around Rs 4.98 lakh crore in market value as foreign fund outflows, weak global cues and rising geopolitical tensions weighed on sentiment.However, after market hours, India’s GDP figures surprised positively. The economy grew at an annual rate of 7.8% in the October-December quarter. While this was lower than the previous quarter’s 8.4%, it was stronger than many expectations. For the full financial year ending March, the government now expects growth of 7.6%, higher than the previous estimate of 7.4% based on the old data series.

After the GDP release, GIFT Nifty jumped, indicating a positive start for the markets on Monday.

What caused the GDP surprise?

Maulik Patel, head of research at Equirus Securities, said growth was supported by strong performance in manufacturing and services. Manufacturing grew by 13.3% year-on-year, while services such as trade, hotels, transport and financial services showed strong growth.

Private consumption improved sharply to 8.7% growth in the quarter, compared to 6% a year ago. This was supported by GST reforms and a strong festive and wedding season. Although investment growth slowed slightly, it remains supported by government capital expenditure.

Nitya Shah, small case manager and co-founder of Kamayakya, said the 7.8% print is important not just for the headline figure but also for what drives it. He noted that the new GDP series, with base year 2022-2023, uses updated GST data and better sector tracking, providing a more realistic picture of the economy.

He added that the strength of manufacturing, the expansion of financial services and the improvement in consumption indicate a solid domestic engine. With the RBI having already cut rates, the macro environment remains supportive, especially for domestically focused companies.

Why did the markets fall on Friday?

Vinod Nair, head of research at Geojit Investments, said markets were under pressure due to weak global signals and rising geopolitical risks. Concerns over US-Iran tensions and uncertainty in AI pushed investors to safe havens.He said there is a risk-off mentality as earnings season draws to a close and global macro factors take center stage. However, he had previously noted that third-quarter GDP data could provide margin support.

Vinit Bolinjkar, head of research at Ventura, said markets had consolidated around 25,400 support. He expects continued trading within a certain range, with support from domestic institutional investors to cushion the sharp declines.

What can you expect on Monday?

With GIFT Nifty indicating gains after Gross Domestic Product (GDP) data, markets could open higher on Monday. Strong growth rates could provide support in the short term, especially for banking, capital goods and consumption-related stocks. However, analysts warn that global factors, foreign money flows and geopolitical risks will continue to influence the price. While GDP figures show underlying resilience, volatility may not disappear completely.

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