Indian markets are likely to face volatility from Monday onwards as investors begin focusing on global developments in the absence of major domestic events, ANI reported citing market experts.
US' tariffs and other countries' responses to them, geopolitical tensions and their impact on US dollar and crude price's movements are some of the global developments investors will look out for.
“Foreign Institutional Investors (FIIs) have slowed their selling in cash markets, but any shift in their stance will remain a crucial indicator for market direction. On the macroeconomic front, the release of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data will also be closely tracked,” said Ajit Mishra, SVP (Research), Religare Broking Ltd.
Market movement will be dictated by global trade concerns, macroeconomic data and FII flows, according to Ashutosh Mishra, Ashika Stock Broking's Head of Institutional Equities Research.
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“Investor sentiment will remain cautious, with defensive sectors and large caps likely to outperform in the near term. We expect the consumer, BFSI and metal sectors to remain in focus,” Mishra said.
“While some reversal trends have been observed in broader markets, concerns regarding earnings downgrades and expensive valuations persist, making investors cautious,” he added.
Upcoming global developments that may affect stocks
{{/usCountry}}“While some reversal trends have been observed in broader markets, concerns regarding earnings downgrades and expensive valuations persist, making investors cautious,” he added.
Upcoming global developments that may affect stocks
{{/usCountry}}China reported on Sunday, March 9, that its consumer price index declined 0.7%, marking the first time in 13 years that retail inflation in the country turned negative.
The Indian government will release retail inflation and industrial production numbers for February on Wednesday, March 12. The US will also be releasing its retail inflation numbers for February while on Thursday, March 13, US will report initial jobless claims and February PPI.
India's stock market will be closed on Friday, March 14, for the Holi festival.
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"With significant inflation data from all three nations, global markets may face volatility, especially in interest rate-sensitive sectors, as investors assess potential central bank actions and economic growth trends," the Bajaj Broking research team said.
Indian market's performance
The Indian stock market witnessed a strong comeback after three consecutive weeks of losses. The market had closed last week with gains of nearly 2%.
The recovery was driven by favourable global and domestic cues, instilling confidence among investors. Nifty settled at 22,552.50, while Sensex closed at 74,332.58, marking a significant rebound.
The global sentiment improved following reports of a delay in U.S. tariffs and the possibility of further negotiations, which helped stabilize financial markets. Additionally, a weaker dollar and a decline in crude oil prices further boosted investor confidence.
Also read: China's retail inflation turns negative for the first time in 1 year
On the domestic front, the Reserve Bank of India's (RBI) decision to infuse additional liquidity into the system added to the positive momentum.
The combination of these factors led to a broad-based rally across sectors, with metal, energy, and pharmaceutical stocks emerging as the top gainers. The broader indices also posted impressive gains, rising between 2.6% and 5.5%.