Market outlook for the week (31-Mar to 04-Apr)

1 Apr 2025 , 10:31 AM

SECTORAL STORY FOR THE WEEK TO MARCH 28, 2025

The week to March 28, 2025 saw Nifty and Sensex showing modest gains of +0.72% and +0.68% respectively. During the week, FPIs were net buyers of $3,231 Million in Indian equities. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (28-Mar)	Index (21-Mar)
Nifty Capital Markets	2.39%	3,415.75	3,336.10
Nifty India Defence	2.34%	6,393.90	6,248.00
Nifty PSU Banks	2.16%	6,263.40	6,130.95
Nifty Private Banks	1.98%	25,733.35	25,232.70
Nifty Banks	1.92%	51,564.85	50,593.55
Nifty FMCG	1.14%	53,589.80	52,986.05
Nifty Non-Banks	1.00%	26,459.60	26,198.50
Nifty CPSE	0.89%	6,139.80	6,085.90
Nifty Infrastructure	0.85%	8,457.80	8,386.70
Nifty IT	0.50%	36,886.15	36,702.80
Nifty Oil & Gas	0.05%	10,549.70	10,544.20
Nifty MNC	0.01%	26,241.50	26,239.50
Nifty Chemicals	-0.14%	27,879.52	27,917.73
Nifty India Digital	-0.52%	8,261.90	8,305.30
Nifty Metals	-1.21%	9,092.50	9,203.55
Nifty Realty	-1.33%	851.30	862.75
Nifty Consumer Durables	-1.65%	35,652.20	36,250.40
Nifty Mobility	-2.06%	18,309.45	18,694.30
Nifty Automobiles	-2.12%	21,295.50	21,756.00
Nifty Healthcare	-2.36%	13,681.30	14,011.90

Data Source: NSE

Out of 20 sectoral indices 12 gave positive returns, while 8 gave negative returns. The negative triggers came from Trump tariffs, so healthcare, automobiles, and mobility were under pressure. Government oriented businesses continued to outperform. Financials have specifically stood out in this week.

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

In positive triggers; the stable US GDP and PCE inflation raised the prospects of US Fed cutting rates. It also makes RBI cutting rates by another 25 bps in April, more likely. Current account deficit (CAD) for Q3FY25 was subdued at $11.5 Billion (1.1% of GDP).

Donald Trump imposed 25% tariffs on imports of cars and auto parts, hitting the Nifty Auto index hard. Also, the current account deficit for Q2FY25 was revised sharply upwards to $16.7 Billion or 1.8% of GDP. That is surely a warning sign for full year CAD!

STOCK MARKET TRIGGERS FOR COMING WEEK TO APRIL 04, 2025

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

• For the coming week, the big domestic data point will be the core sector growth for February and the fiscal deficit update as of Feb-25. While core sector is likely to improve on its 4.6% reading, fiscal deficit is likely to get closer to full year target for FY25.
• Focus will continue on USDINR and the Brent Crude prices. While the USDINR rallied to ₹85.56/$ on FPI flows, Crude was steady at $72/bbl on demand concerns. Globally, the OPEC Plus is losing the oil swing factor to the US, Canada, Brazil, and China.
• The big news this week is that the reciprocal tariffs take shape. The US has already imposed 25% tariffs on auto and auto component imports, which has hit Indian companies. This we could the list getting expanded.
• Key global data points. PMI, Construction Spending, Factory Orders, Crude Inventories, Initial Jobless Claims, Fed Balance Sheet, Powell Speak (US). PMI, Unemployment, CPI Inflation (EU); IIP, PMI, household spending (Japan); Composite PMI (China); PMI, Bank of England Financial Stability Report, HPI (UK).

What does this mean for Nifty and Sensex in the coming week to April 04, 2025.

PARTING THOUGHTS ON MARKET INDEX LEVELS

VIX was almost flat at 12.72 for the week. However, with dwindling market volumes, VIX is becoming less representative.

• Nifty closed the week at 23,519 Spot. Nifty has immediate support at 23,430 and major support at 23,231. Immediate resistance is at 23,629 and later at 23,828. Nifty stays positive as long as it holds 23,477; but below 23,477, fresh shorts can be initiated.
• Sensex closed the week at 77,415 Spot. Sensex has immediate support at 77,145 and major support at 76,564. Immediate resistance is at 77,726 and later at 78,307. Sensex stays positive as long as it holds 78,255; but below 78,255, fresh shorts can be initiated.

Low VIX is indicating buy-on-dips market. The immediate triggers will be RBI policy statement, Fed policy minutes, and the US unemployment data. A bigger test for the market would be if the rupee can hold value, and whether FPI flows will sustain after the index rebalancing is done.