The stock market witnessed significant movement last week, with the Nifty index climbing 426 points, or 1.93%, closing at 22,552. This marks a pivotal turnaround, as it represents the Nifty’s first weekly gain after a three-week slump and the most substantial percentage increase since early December. Notably, the NSE SmallCap Index surged by 5.47%, while the Nifty MicroCap Index soared 6.71%.
Market Trends and Insights
Over the past week, two key trends emerged in trading. Firstly, a notably positive market breadth was observed during the last three trading days. Secondly, the Nifty successfully closed above its five-day exponential moving average (5 DEMA) on March 5, a threshold it hadn’t crossed since February 6, 2025. However, it’s worth noting that last week’s rally occurred on relatively low trading volumes, reflecting investors’ hesitance to enter the market after weeks of declines.
- Market Highlights:
- Nifty gained 426 points.
- NSE SmallCap Index up 5.47%.
- Nifty MicroCap Index increased by 6.71%.
Economic Indicators and Political Developments
On the economic front, the U.S. non-farm payroll data released on Friday showed a weaker-than-expected addition of 151,000 jobs, falling short of the anticipated 159,000. The unemployment rate also ticked up to 4.1%, compared to 4.0% in January.
In political news, former President Donald Trump announced a delay in imposing a 25% tariff on goods imported from Canada and Mexico, extending the exemption under the United States-Mexico-Canada Agreement (USMCA) until April 2. However, he later hinted at possible reciprocal tariffs on Canadian dairy and lumber, alongside a potential easing of energy sanctions on Russia to encourage progress in the Ukraine ceasefire negotiations.
Federal Reserve’s Position
In contrast to the swirling trade policies, Federal Reserve Chair Jerome Powell maintained a calm demeanor, suggesting that the Fed might adopt a patient stance regarding interest rates as the economy appears stable amid ongoing uncertainties. Following Powell’s remarks, Wall Street ended Friday on a positive note, recovering from earlier losses. Despite this, the week concluded with declines across major indices: the Dow fell 2.4%, the S&P 500 decreased by 3.1%, and the Nasdaq dropped 3.5%.
Upcoming Diplomatic Talks
Looking ahead, U.S. and Ukrainian officials are scheduled to meet in Saudi Arabia this Wednesday, a meeting prompted by Zelensky’s recent apology following tensions that arose on February 28. Any agreements reached that could bring an end to the ongoing Russia-Ukraine conflict would undoubtedly resonate positively in the markets.
Strategic Petroleum Reserve Moves
Seizing the opportunity presented by current low crude oil prices, the U.S. is preparing to invest $20 billion in crude oil purchases as part of an initiative to refill its depleted Strategic Petroleum Reserves (SPR).
Technical Analysis of the Nifty
As we analyze the Nifty’s performance, it now encounters resistance at the previous high of 22,668 from the week ending February 28 and from a downward-sloping trendline formed by lows on August 9, 2024, and November 22, 2024, positioned at 22,620. For a sustained positive trend, a close above 22,668 is essential.
On the flip side, initial support levels to watch are at 22,245 followed by 21,964.
Navigating these market conditions requires careful consideration and analysis, especially as we await further developments both economically and politically.
