Despite mixed cues from global markets amid concerns over upcoming US tariffs; Indian market extended the gains for the second consecutive week on the back of persistent buying from domestic as well as FIIs and appreciation in rupee against the dollar. BSE Sensex added 509.41 points or 0.66 percent to end at 77,414.92, and NSE Nifty rose 168.95 points or 0.72 percent to close at 23,519.35. Mixed trading was seen in the broader market. The BSE Mid-cap Index shed 0. 7 percent and the BSE Small-cap index declined 1.4 per cent. FIIs continued their buying in this week also as they bought equities worth Rs17,426.31 crore, while DII also bought equities worth Rs6,797.49 crore.
The change in FII strategy from sustained selling to modest buying was visible in the week that ended. Analysts attribute three major reasons for the reversal. One is the valuations turning attractive after the Nifty plunged 16 per cent from the September peak, till February. Another reason was the recent appreciation in rupee which led to reversal of the momentum trade towards US investment. Finally, India’s macros like GDP, IIP and CPI inflation improved, paving the way for a rally in the market. RBI move to double to 10 per cent a cap on investment by individual foreign investors in listed companies, will give boost to capital inflows. In the near term, the trend in FII flows will depend mainly on Trump’s reciprocal tariffs expected on April 2. FIIs were sellers seven times on a monthly basis in the financial year that ends on Monday, March 31, 205. The highest exodus happened in October and January when the FIIs sold shares worth Rs94,017 crore and Rs78,027 crore, respectively.
FIIs were net buyers in June, July, August, September and December with highest buying seen at Rs57,724 crore in September. The Indian rupee is on track to log its best monthly gain since November 2018, boosted by seasonal and portfolio dollar inflows alongside a drop in bearish positions on the currency. After struggling near record-low levels until mid-February, the rupee has staged a sharp recovery to trade nearly flat on the year. Attention of markets now turns to a fresh round of tariffs the Trump administration is set to unveil on April 2, with Trump recently hinting that these measures might diverge from the straightforward tit-for-tat duties previously pledged. The MPC of the RBI is likely to cut Repo rate by 25 basis points (bps) in the upcoming monetary policy on April 9. Observers expect RBI focus to shift from concerns about inflation to supporting growth. FY26 GDP forecast may remain unchanged at 6.7 percent, but expect the RBI statement to cite downside risks emerging from global uncertainty triggered by Trump’s new tariff regime. Indian stock markets will remain closed on Monday, March 31, in observance of Eid-ul-Fitr. Traders should note that April will bring three market holidays—Shri Mahavir Jayanti (April 10), Dr. B.R. Ambedkar Jayanti (April 14), and Good Friday (April 18). That is testament to the fact that investing without education and research will ultimately lead to regrettable investment decisions. Research is much more than just listening to popular opinion.
F&O/ SECTOR WATCH
Tracking the broader markets, the derivatives segment witnessed robust volumes during the week ended. Rollovers in Nifty futures declined at 76 per cent (last month 84%), above 3-month average of 82 per cent. On other hand, market wide rollovers stood at 90 per cent (last month’s market wide 89%). Looking at Nifty’s option data, the highest Call Open Interest was observed at the 24,000 and 23,800 strikes, while Put writers were at the 23,500 and 23,300 strikes. Implied Volatility (IV) for Nifty’s Call options settled at 13.38 per cent, while Put options concluded at 14.43 per cent. The India VIX, a key indicator of market volatility, concluded the week at 13.30 per cent. The Put-Call Ratio of Open Interest (PCR OI) stood at 1.06 for the week. The drop in the Nifty rollover rate to 76 per cent, down from 83.57 per cent last month and below the three-month average of 82 per cent, signals weak momentum for the April series. Bank Nifty rollovers came in at 76.98 per cent, lower than last month’s 81.64 per cent, but still above the three-month average of 73.47 per cent, indicating a similar trend. Nifty positions were largely carried forward within the 23,550-23,600 futures range, while Bank Nifty rollovers at 51,650-51,600. A breach of these levels may trigger further downside in both indices. Traders are advised to monitor these levels closely and track open interest developments, as they could further influence market direction. For the upcoming sessions, Nifty has support at 23,200 and may face resistance at 23,800 and 24,000.Stocks looking good are Avenue Supermarts, Divi’s Labs, Deepak Fertilisers, Chambal Fertilisers, GAIL, Tata Consumer, Muthoot Finance and MGL.Stocks looking weak are Maruti, Tata Elexi and Wipro.
(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)