The Indian stock market wrapped up the 2024-25 financial year on a high note, buoyed by significant gains in March. This positive momentum was largely fueled by robust foreign capital inflows, a final wave of profit-taking, and improving domestic economic indicators. As investors prepare for the new fiscal year, closely watched market signals in the first week of 2025-26 will include updates on tariffs from Donald Trump, foreign investment trends, and essential macroeconomic data.
Market Performance Overview
The Sensex and Nifty 50 indices maintained their winning streak, marking a second consecutive week of gains. The Nifty 50 reached an impressive 11-week high before retreating slightly due to profit-taking at elevated levels. Ultimately, the indices closed at 23,519.30 and 77,414.92, respectively.
- Weekly Performance:
- BSE Sensex: +509.41 points (0.66%)
- NSE Nifty: +168.95 points (0.72%)
Puneet Singhania, Director at Master Trust Group, noted that all major indices ended above crucial moving averages, indicating strong technical buying and value accumulation near significant demand zones, rather than substantial fundamental shifts.
Economic Context
Despite a turbulent ride throughout the 2023-24 fiscal year, the stock market managed to rebound in FY25. The BSE benchmark surged by 3,763.57 points (5.10%), while the Nifty increased by 1,192.45 points (5.34%). Vinod Nair, Head of Research at Geojit Investments Ltd, remarked that although the final week began robustly, it concluded on a flat note as investor sentiment waned following tariff announcements in the automobile sector.
Upcoming Market Triggers
Looking ahead, several key factors will influence market dynamics in the upcoming week:
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Macroeconomic Data:
- HSBC Composite PMI for March is expected on April 4, with a forecast of 58.6. A stronger reading could indicate robust economic growth.
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Automobile Sales:
- Monthly auto sales figures for March will be pivotal in guiding market sentiment, especially for automotive stocks.
- Initial Public Offerings (IPOs):
- The primary market is expected to see minimal activity with no new IPOs and only a few listings planned in the SME segment.
Foreign Institutional Investment (FII) Activity
The market experienced a significant boost last week, thanks to foreign institutional investors (FIIs) returning as net buyers, contributing ₹17,426 crore to the cash segment, complemented by domestic institutional investors (DIIs) adding ₹6,797 crore. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit, highlighted that the shift in FII strategy from consistent selling to selective buying has been critical to this rally.
- FII Insights:
- Attractive valuations following a 16% correction since September 2024.
- Recent rupee appreciation has shifted investment momentum back to India.
- Improved macroeconomic indicators like GDP and CPI inflation have set a favorable environment for market growth.
Global Economic Influences
As the upcoming holiday-shortened week unfolds, market participants will keep a keen eye on global developments, particularly the implications of reciprocal tariffs set to take effect on April 2. The potential impact of U.S. President Donald Trump’s tariff policies on global trade will be closely monitored.
Key Global Data Releases
Several crucial economic indicators from the U.S. and China will be released this week:
- U.S. Job Openings (February): Data set for April 1.
- China’s Caixin Manufacturing PMI: Expected on April 1, which is projected to be 51.
- U.S. Average Hourly Earnings and Non-Farm Payrolls: To be published on April 4.
Ajit Mishra from Religare Broking Ltd pointed out that despite favorable macroeconomic data, uncertainty surrounding tariff impacts continues to weigh on market sentiment.
Technical Analysis and Corporate Actions
From a technical standpoint, the Nifty 50’s recent breakout could pave the way for a rally towards 24,100. However, a breakdown could lead to extended consolidation, with support at 23,100.
In terms of corporate actions, shares of several companies, including United Spirits and Varun Beverages, are set to trade ex-dividend this week, further influencing market movements.
As investors gear up for the new fiscal year, staying informed about these developments will be crucial for navigating the evolving landscape of the Indian stock market.
