Market outlook: Potential volatility ahead as investors monitor tariff negotiations
Experts reveal that the Indian stock markets may experience some volatility ahead as investors monitor global events closely due to a lack of significant domestic activities. Factors like tariff negotiations, geopolitical tensions, and the actions of Foreign Institutional Investors (FIIs) could impact market direction in the upcoming week, suggest market analysts. According to Ajit Mishra from Religare Broking Ltd, the FIIs’ activity in cash markets, as well as macroeconomic indicators such as the Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data, will play a crucial role in determining market trends.
Upcoming week’s data releases from China, India, and the United States may also influence global markets significantly, as per the research team of Bajaj Broking. China’s CPI and PPI data for February, India’s CPI and Industrial Production figures, along with the US CPI, jobless claims, and PPI data are among the key economic indicators to be released. These insights could help shape market sentiments across the globe, especially towards interest rate-sensitive sectors, amid speculation about central bank actions.
Following three consecutive weeks of losses, Indian markets witnessed a rebound of nearly 2 percent, fueled by favorable global and domestic cues. Reports of potential US tariff delays and the prospect of future negotiations contributed to an improved global sentiment. In addition, a weakened dollar and a decline in crude oil prices boosted investor confidence. The RBI’s decision to infuse additional liquidity further supported the positive trend, leading to a broad-based sectoral rally with metal, energy, and pharmaceutical stocks recording notable gains.
The positive momentum propelled the Nifty to 22,552.50 and the Sensex to 74,332.58, marking a substantial recovery. Market analysts anticipate a potentially volatile week ahead, driven by global trade concerns, macroeconomic data releases, and FII flows. In light of these factors, investor focus is likely to be on defensive sectors and large caps in the short term, while sectors like consumer, BFSI, and metals are expected to attract attention. Despite some observed reversals in broader markets, worries surrounding earnings downgrades and high valuations continue to weigh on investor sentiment, urging caution in trading decisions.
