Last week witnessed a remarkable surge in the Nifty, which climbed by an impressive 4.26%, marking its best weekly performance since February 2021. This upward momentum was fueled by significant trading activity, particularly evident on Friday when daily trading volumes reached their highest level since November 2024.
Midcaps and Small Caps Soar
The Midcap 100 index demonstrated exceptional growth, rising 7.74%, its strongest weekly gain since April 2020. Meanwhile, the SmallCaps 100 soared by 8.64%, showcasing its best performance since June 2020. These gains highlight a positive shift in market sentiment, largely driven by the strengthening of the Indian rupee.
- Rupee Performance: The rupee appreciated by 40 paise, reaching 85.97 against the US dollar, marking its eighth consecutive day of gains. This achievement represents a two-and-a-half-month high, contributing to the bullish market sentiment.
- FOMO: Investors are increasingly motivated by the fear of missing out, eager to capitalize on what they perceive as a market bottom.
Trends and Technical Analysis
Recently, analysts posed a pivotal question: Is a market turnaround underway? The answer seems affirmative, as the Nifty broke through critical trendlines on the weekly charts. The trendline, marked by connecting the all-time high of 26,277 from the week ending September 27, 2024, and the 24,781 low from December 20, 2024, was breached, concluding the week at 23,350 after peaking at 23,402.
- A downward-sloping trendline indicates that even if the Nifty falls to 23,180, it will remain above this crucial support level.
- Investors should remain vigilant, as the 23,800 mark poses significant resistance to further upward movement.
US Market Recovery
In the United States, markets rebounded after an initial decline, with the S&P 500 gaining 0.5%, the Nasdaq inching up by 0.17%, and the Dow rising 1.2%—its largest weekly increase in two months. This recovery was bolstered by positive comments from former President Trump regarding upcoming tariffs, alleviating some market fears.
Federal Reserve Insights
The Federal Open Market Committee (FOMC) convened on March 18 and 19, deciding to maintain current interest rates. The Fed signaled that they anticipate two more rate cuts within this calendar year, despite acknowledging the ongoing challenges posed by inflation.
- The projected growth for the 2025 GDP has been revised down to 1.7%, slightly lower than the previous estimate of 2.1%.
- As we look ahead, discussions around trade tariffs and currency fluctuations are expected to keep market dynamics engaging.
With over 36 years of experience in capital markets, the insights shared are drawn from a seasoned perspective, offering a nuanced look at current trends and future expectations. Stay tuned for upcoming developments that could shape market trajectories as we advance through the year.
