The Indian stock market is currently navigating through turbulent waters, influenced heavily by the ongoing trade war driven by US tariff policies. Following a significant rebound after a temporary halt on tariffs, the market ended the week with only a slight dip. Investors are keenly watching for important economic indicators, including retail inflation data, corporate earnings, and global tariff updates, as they prepare for the third week of the fiscal year 2026.

Market Overview: Sensex and Nifty Trends

In the previous week, both the BSE Sensex and Nifty 50 indices faced challenges, marking their second consecutive week of declines. Investor sentiments were shaken by uncertainty surrounding US President Donald Trump’s tariff announcements. Despite this, a 90-day pause on retaliatory tariffs provided a much-needed boost, allowing the markets to recover some lost ground.

• The Nifty 50 index saw a 1.92% increase, closing at 22,828.55 on Friday.
• The BSE Sensex rose by 1.77%, finishing at 75,157.26.
• However, on a weekly basis, the BSE benchmark fell by 207.43 points (0.27%), while the Nifty dropped 75.9 points (0.33%).

The Nifty index faced a low of 21,743.65, a level not seen since early June 2024, before bouncing back. Among sector performance, real estate stocks lagged, while defensive FMCG stocks showed resilience.

Key Economic Factors Impacting Markets

Concerns about a widening current account deficit and ongoing foreign portfolio outflows have placed pressure on the Indian rupee, which depreciated by 0.78% to 86.18 against the dollar. Puneet Singhania, Director at Master Trust Group, noted that market volatility spiked significantly, with the India VIX surging by 46% due to escalating global trade tensions.

• China responded to US tariffs with retaliatory measures, imposing duties up to 125% on American goods, prompting further escalations.
• The current atmosphere has led to subdued expectations as the Indian stock market enters its earnings season.

Looking Ahead: Key Triggers for Investors

As the third week of April approaches, investors will be keeping an eye on:

• Q4 corporate earnings from major companies like Wipro, Infosys, HDFC Bank, and ICICI Bank.
• Retail inflation and wholesale price index (WPI) data, which will be released this week.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted the impact of US tariffs on foreign portfolio investments in India, as foreign institutional investors (FIIs) sold approximately ₹20,911 crore worth of stocks recently.

Current Market Dynamics: Foreign and Domestic Investments

Despite the selling pressure from FIIs, domestic institutional investors (DIIs) provided support with net inflows of around ₹21,955 crore. As of now, FPIs have sold equities totaling ₹31,988 crore in April alone, raising concerns about the overall investment climate.

• The trend suggests that once market conditions stabilize, FIIs may consider returning to India, especially given the potential for 6% growth in FY26, even amidst global uncertainties.

Global Influences on Market Sentiment

The recent turmoil in the stock market was triggered by US announcements regarding reciprocal tariffs, with China’s aggressive response intensifying fears of a prolonged trade conflict. However, a brief sense of relief was felt when the US delayed implementing tariffs against most nations aside from China.

Investors should remain vigilant as the upcoming week will likely witness continued volatility, especially with major macroeconomic indicators expected from the US, UK, and China.

Technical Insights and Corporate Actions

From a technical standpoint, the Nifty 50 is testing its 20-day exponential moving average (DEMA) around the 22,900 mark. A stable close above this threshold could pave the way for a rally towards 23,400.

Additionally, several companies, including Hexaware Technologies, will trade ex-dividend in the upcoming week, marking significant corporate actions that investors should note.

In conclusion, as the Indian stock market grapples with both domestic and international pressures, staying informed about macroeconomic trends and corporate performance will be crucial for investors looking to navigate these volatile times successfully.