The stock market bounced back last week, ending its three-week losing streak with nearly 2% gains. This positive movement was driven by strong GDP growth in the third quarter of FY25, a recovery in consumer spending, and a sharp drop in oil prices. Investors were also encouraged by China’s plans for economic stimulus and a steep decline in the US dollar index, despite ongoing uncertainty about Donald Trump’s economic policies.
Market Performance
- Nifty 50 gained 428 points (1.93%), closing at 22,553.
- BSE Sensex rose 1,134 points (1.55%), ending at 74,333.
- Nifty Midcap 100 and Nifty Smallcap 250 outperformed the broader market, climbing 2.66% and 5.5%, respectively.
- Metal stocks jumped 8.6% due to hopes of Chinese economic stimulus.
- Auto, FMCG, pharma, and oil & gas sectors also saw strong gains.
Market Outlook for the Coming Week
Experts believe that in the upcoming holiday-shortened week, the market may continue its positive trend but trade within a range. Factors like falling oil prices and a weaker US dollar will support investor confidence. However, all eyes will be on US and India’s inflation data, as well as institutional investors’ trading trends.
Vinod Nair, Head of Research at Geojit Financial Services, noted that while the market has recovered from oversold levels, a sustained uptrend will depend on corporate earnings growth and clarity on tariffs. He added that broader market valuations are still high, which could limit an all-round recovery in the short term. However, large-cap stocks appear attractive for investors.
Also Read: China’s Plan to Overcome US Tariffs and Keep Its Economy Strong
10 Key Factors to Watch in the Market Next Week
US Inflation
The much-anticipated US inflation data for February, set for release on March 12, is expected to remain flat or show a slight decline compared to the 3% inflation rate recorded in January. Similarly, core inflation—which excludes food and energy prices—is also projected to see a moderate drop from January’s 3.3%.
These inflation figures, along with jobs data and the Producer Price Index (PPI), will play a crucial role in shaping the Federal Reserve’s next move ahead of its March 19 policy meeting. The Fed had previously opted to pause its rate cut cycle in January 2025, following initial cuts that began in September 2024.
Global Economic Updates
Investors are closely watching Japan’s Q4-2024 GDP growth numbers, which will provide insights into the country’s economic performance.
Meanwhile, China’s key political meetings, known as the “Two Sessions,” will wrap up soon. The Chinese People’s Political Consultative Conference (a top political advisory group) will end on March 10, followed by the National People’s Congress (the main lawmaking body) on March 11. These meetings are important worldwide, especially as the US, under Trump’s second term, has imposed a 20% tariff on Chinese goods.
China has set an economic growth target of around 5% and a budget deficit of 4%. This has raised hopes that the government may introduce more financial support to boost domestic spending. Besides encouraging consumer demand, China is also focused on becoming a global leader in technology.
US Tariffs & Market Impact
Investors are closely watching developments on US tariffs. Trump’s fluctuating trade policies with Mexico and Canada have created uncertainty for businesses and investors. Tariffs on these countries, initially set for March 4, have been delayed until April 2. Meanwhile, China already faces a 20% tariff from the US.
Concerns over tariffs and trade policies have affected the US dollar, which fell 3.4% last week—the biggest drop since November 2022—closing at 103.905. However, the US 10-year Treasury yield rose to 4.305% after seven weeks of decline.
Inflation & Economic Data
India’s February inflation data, along with January industrial production and February vehicle sales, will be released on March 12. Economists expect inflation to drop further from January’s 4.31%, marking the fourth straight month of decline. This data will be key ahead of the RBI’s policy meeting on April 9.
Additionally, banking loan & deposit growth (as of Feb 28), forex reserves (as of Mar 7), and trade balance data (for February) will be released on March 14.
Oil Prices & Market Impact
Falling oil prices benefited equity markets last week, especially for oil-importing countries like India. Brent crude dropped 3.36%, closing at $70.36 per barrel—the lowest since November 2021—marking a 15% decline from its January 2025 high. Concerns over a trade war, rising OPEC+ supply, and potential eased sanctions on Russia pressured prices, though China’s strong growth outlook provided some support. Experts suggest a short-term rebound is possible despite the bearish trend.
Foreign & Domestic Investment
Foreign Institutional Investors (FIIs) have been selling for six straight months, with net sales of ₹15,500 crore in March so far. However, Domestic Institutional Investors (DIIs) have provided support, buying ₹20,951 crore worth of shares. A weaker US dollar may help slow FII outflows.
IPO Updates
The main market will see little activity next week, but the SME segment remains active. PDP Shipping & Projects’ IPO opens on March 10, followed by Super Iron Foundry on March 11. NAPS Global India will debut on the BSE SME on March 11.
Market Trends & Technical Outlook
The Nifty 50 has shifted to a bullish trend after recovering from its February 28 dip, staying above 22,500 for the past two sessions. It formed a bullish pattern on the weekly chart with strong volume and remains above key moving averages. If it holds 22,500, experts expect a move toward 22,750-22,800, with 23,000 as the next resistance. Support is at 22,200.
Read More: Trump’s Reciprocal Tariffs on India and China: A New Era in Global Trade Wars
F&O & Volatility
Nifty is likely to trade between 22,300-23,000 in the short term. Options data shows strong resistance at 23,000-23,100 and support at 22,300-22,500.
Meanwhile, India VIX (volatility index) fell for the third week, closing at 13.47—its lowest since December 2024—indicating reduced market fear, which is positive for investors.
