Market outlook for the week (10-Mar to 14-Mar)

10 Mar 2025 , 09:32 AM

SECTORAL STORY FOR THE WEEK TO MARCH 07, 2025

The week to March 07, 2025 saw Nifty and Sensex gaining by +1.93% and +1.55% respectively. During the week, FPIs were net sellers of $(2,835) Million in Indian equities, as negative sentiments are getting deeper. Here are the 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (07-Mar)	Index (28-Feb)
Nifty India Defence	10.69%	5,680.40	5,131.80
Nifty Metals	8.61%	8,926.90	8,219.25
Nifty CPSE	6.06%	5,714.00	5,387.30
Nifty Energy	5.90%	31,788.45	30,018.15
Nifty Oil & Gas	5.33%	10,101.50	9,590.60
Nifty PSU Banks	4.94%	5,931.40	5,652.10
Nifty Infrastructure	4.37%	8,000.85	7,665.55
Nifty MNC	3.40%	25,782.15	24,934.40
Nifty Mobility	2.92%	17,922.15	17,413.00
Nifty Healthcare	2.75%	13,034.85	12,685.50
Nifty Automobiles	2.49%	21,009.70	20,498.60
Nifty FMCG	2.37%	51,891.80	50,689.00
Nifty Consumer Durables	2.34%	35,266.30	34,458.85
Nifty Realty	2.31%	816.35	797.90
Nifty IT	1.35%	37,820.45	37,318.30
Nifty Non-Banks	1.23%	24,591.65	24,291.95
Nifty India Digital	0.69%	8,132.20	8,076.40
Nifty Banks	0.32%	48,497.50	48,344.70
Nifty Private Banks	0.28%	24,292.95	24,225.15
Nifty Capital Markets	-0.99%	3,060.30	3,091.05

Data Source: NSE

Here are key takeaways from weekly sectoral returns.

• In a welcome change, out of 20 sectoral indices, 19 sectors gave positive returns. Sectors that showed relative strength, surprisingly, were Defence, Metals, CPSE, Energy, and oil & gas. Metals were a China story, while a government led recovery is the big bet now.
• There was just one sector contracting this week, Capital Markets, and that too is largely on account of the major volume hit that brokerage and capital market players have taken due to a fall in volumes. Private banks were surprisingly tepid in the week.
• For the week, the arithmetic average of returns of the 20 sectors stood at +3.37%. The bottom 10 sectors delivered +1.24%, while top-10 delivered +5.50%. There were 8 sectors bouncing more than 3%; of which 5 sectors bounced over 5% in the week.

Nifty VIX was flat at 13.47 levels. However, with the volumes dwindling sharply, the VIX itself may not have much of analytical value.

WEEK THAT WAS; THE GOOD, THE BAD AND THE UGLY

What decided the market move last week? Let us look at the positive triggers first. Firstly, even as the rupee stayed steady at around ₹87.10/$, the price of Brent Crude fell to $70/bbl. That is likely to be a sentimental positive for India. The US unemployment figure at 4.1% means the rate cut this year could be front-ended. That would reduce the pressure of FPI outflows for Indian markets. There have been some key upgrades with Macquarie upgrading Reliance Industries to Overweight and JP Morgan upgrading BEL to Overweight.

Let us turn to the negative swing factors in the week. The tariff war continues with Trump still threatening reciprocal tariffs on India. That remains a sentimental overhang. The auto numbers disappointed in February with contraction across passenger vehicles and two-wheelers. Amidst the fall in markets, once major valuation downgrade has been of Reliance Retail with brokers cutting the valuation of Reliance Retail by nearly half from $100 billion to $50 billion. This is likely to force the company to take up urgent cost cutting measures.

STOCK MARKET TRIGGERS FOR COMING WEEK TO MARCH 14, 2025

Here are key triggers that could influence stock markets next week.

• For the coming week, the big domestic data points will be the CPI inflation and the IIP data, which will be announced on Wednesday. While CPI inflation is broadly expected to trend lower towards 4%, the IIP is expected to exhibit a bounce, led by manufacturing. On trade, the goods deficit is expected to widen, but services surplus may expand.
• The two major data points in focus continue to be crude prices and USDINR equation. With the European uncertainty, oil prices almost dipped to below $70/bbl, and that weakness in oil is likely to continue. The rupee continues to be under pressure at ₹87.10/$, and the persistent FPI flows are likely to worsen the equation.
• In terms of global data flows, the big focus area would be the US CPI inflation and the Fed speak during the coming week. But the real interest area would be the next FOMC meeting coming up on March 18, 2025; especially in the light of the higher than expected unemployment and the lower than expected non-farm payroll addition.
• Key global data points. CPI Inflation, Consumer Inflation Expectations, EIA Crude stocks, WASDE Report, PPI, jobless claims, and OPEC report (US). New Loans (China); ECB Speak, IIP (EU); Household Spending, GDP, Current Account (Japan); IIP, GDP, Trade (UK).

What does this mean for Nifty and Sensex in the coming week to March 14, 2025.

PARTING THOUGHTS ON MARKET INDEX LEVELS

For the coming week, there are 3 things to observe.

• VIX was flat at 13.47 levels compared to 13.49 last week. However, with rapid dwindling of volumes, the VIX is becoming less representative of the fear factor.
• Nifty has its next big support at 22,000 levels. Going ahead, 22,636 and 22,467 will be the key resistance and support levels for the Nifty.
• Most IPO issues are on hold for now and many big IPOs are on hold, despite filing their DRHP and also getting the approval from SEBI.

The GDP data did little to boost the market as global tariff sentiments continued to be tepid. For now, the uncertainty has to really end, before any decisive move can be expected in the Indian equity markets.