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The Indian stock market is poised for a positive opening on Monday, continuing the upward trend observed throughout the previous week. This anticipation stems from a confluence of factors, primarily the generally positive cues emanating from global markets, albeit tempered by some elements of uncertainty. The benchmark indices, Sensex and Nifty 50, are expected to reflect this optimism, driven by a mix of international market performance and domestic investor sentiment. Asian markets present a mixed picture, with some indices trading lower, contrasting with the robust performance of the US stock market, which concluded Friday with gains. The Dow Jones Industrial Average, in particular, recorded its most significant weekly increase in the past two months, contributing to a positive global backdrop for Indian equities. However, the performance of Asian markets necessitates cautious optimism, as discrepancies between regions could influence trading patterns in India. The upcoming week is crucial for investors as several key market triggers are scheduled to unfold. The expiry of March derivatives contracts is likely to induce volatility as traders adjust their positions. Furthermore, the potential imposition of tariffs by former US President Donald Trump is a significant concern, impacting global trade dynamics and potentially influencing investor decisions. The flow of foreign funds into and out of the Indian market is another critical factor, as these flows can significantly affect market liquidity and sentiment. Investors will closely monitor domestic and global macroeconomic data releases, which provide insights into the health of the economy and influence investment strategies. Other critical global market cues will also shape market movements in the final week of the fiscal year 2025, making it a pivotal period for investors.
Last Friday witnessed a strong performance in the Indian stock market, marking the fifth consecutive session of gains. This sustained upward momentum underscores the prevailing bullish sentiment among investors. Over the course of the week, both the Sensex and Nifty 50 experienced substantial increases, exceeding 4%, marking their best weekly performance since February 2021. The Sensex climbed 557.45 points, or 0.73%, to conclude at 76,905.51, while the Nifty 50 rose 159.75 points, or 0.69%, to settle at 23,350.40. According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., the recent market correction has made stocks across various sectors, including mid and small-cap indices, more attractive to investors. This increased attractiveness prompted short covering, which further propelled the Sensex past the 77,000 mark during intraday trading. Additionally, Tapse suggested that investors may have been squaring off their positions in anticipation of the monthly Futures and Options (F&O) expiry, resulting in a sharp rally. The interplay between attractive stock valuations, short covering, and F&O expiry dynamics contributed to the strong performance of the Indian stock market. However, caution is advised as the volatility associated with F&O expiry can lead to unpredictable market movements.
Examining specific global market cues reveals further insights into the factors influencing the Indian stock market. Asian markets exhibited a predominantly negative trend on Monday, preceding the deadline for the implementation of former US President Donald Trump's reciprocal tariff policy on April 2. Japan's Nikkei 225 index recorded a gain of 0.28%, while the Topix index increased by 0.13%. In contrast, South Korea's Kospi index fell by 0.36%, and the Kosdaq index eased by 0.05%. Futures for Hong Kong's Hang Seng index indicated a weaker opening, underscoring the prevailing uncertainty in the Asian region. The Gift Nifty was trading around the 23,500 level, indicating a premium of approximately 120 points compared to the Nifty futures' previous closing price. This premium suggests a gap-up start for the Indian stock market indices, potentially driven by positive sentiments and expectations of further gains. Wall Street ended higher on Friday, spurred by comments from former US President Donald Trump, which offered a glimmer of hope that previously announced tariffs slated for early April might be less severe than initially feared. The Dow Jones Industrial Average rose by 32.03 points, or 0.08%, to 41,985.35, while the S&P 500 increased by 4.67 points, or 0.08%, to 5,667.56. The Nasdaq Composite closed 92.43 points, or 0.52%, higher at 17,784.05. Over the week, the S&P 500 gained 0.5%, the Nasdaq rose 0.17%, and the Dow rallied 1.2%, reflecting a generally positive trend in the US stock market. Significant movements in individual stocks also merit attention. Tesla's share price rallied by 5.27%, while Nvidia shares fell by 0.70%. Microsoft's stock price gained 1.14%, while Nike shares declined 5.46%. FedEx stock slumped 6.45%, and UPS stock declined 1.61%. Boeing's share price jumped by 3.06%, highlighting the diverse range of factors influencing individual stock performance.
The planned "reciprocal tariffs" from the Trump administration, anticipated to take effect on April 2, are reportedly expected to be more targeted than the sweeping measures previously threatened, according to Bloomberg. Sources suggest that certain countries may be exempt, and existing levies on steel and other metals may not be cumulative. This refined approach could alleviate some of the initial concerns regarding the potential impact of the tariffs on global trade. Japan's factory activity experienced its most significant decline in a year in March, while the service sector also witnessed a loss of momentum. The au Jibun Bank Japan flash manufacturing purchasing manager's index (PMI) decreased to 48.3 in March, the lowest level in a year, from 49.0 in February, according to Reuters. The au Jibun Bank flash services PMI contracted to 49.5 in March from 53.7 in February, marking the first contractionary reading since last October. The au Jibun Bank flash Japan composite PMI, which combines both manufacturing and service sector activity, slipped to 48.5 from 52.0 in February, also representing the first contraction in five months. This data suggests a slowdown in economic activity in Japan, potentially impacting regional and global markets. Gold prices traded higher due to concerns surrounding Trump's impending reciprocal tariffs and the possibility of interest rate cuts by the US Federal Reserve later this year. These factors bolstered gold's appeal as a safe-haven asset, leading to increased demand and higher prices. Spot gold rose 0.1% to $3,025.12 an ounce, while the US gold futures gained 0.3% to $3,030.70. Crude oil prices experienced a slight decline after gaining over 2% last week. Brent crude oil fell 0.14% to $72.06 a barrel after rising 2.2% last week, while the US West Texas Intermediate (WTI) crude futures eased 0.03% to $68.26. These movements in commodity prices reflect a complex interplay of factors, including global demand, geopolitical tensions, and supply-side dynamics. Overall, the article presents a comprehensive overview of the factors influencing the Indian stock market, encompassing global market cues, domestic investor sentiment, and macroeconomic indicators. While the Indian stock market is anticipated to open higher based on current trends, investors should remain vigilant and adaptable to potential fluctuations in global markets and evolving economic conditions. Monitoring key market triggers, such as the March derivatives expiry, US tariff announcements, and foreign fund flows, is essential for informed decision-making and risk management. The interplay of global and domestic factors underscores the interconnectedness of the modern financial landscape and necessitates a holistic approach to investment strategies. The complexities discussed within the article highlight the importance of due diligence and careful consideration of various influences before making any significant financial commitments. Furthermore, the insights provided by market analysts, such as Prashanth Tapse, contribute to a more nuanced understanding of market dynamics and can aid investors in navigating the complexities of the stock market. By staying informed and adaptable, investors can effectively manage risk and capitalize on opportunities within the ever-evolving financial landscape.
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