Markets Rally to Multi-Year Highs: Can the Momentum Sustain?

The Indian equity market had a stellar week (March 17-21, 2025), witnessing its biggest weekly gain in over four years. The Nifty 50 surged 4.3%, while the Sensex climbed 3.38%, fueled by renewed Foreign Institutional Investor (FII) buying, strong macroeconomic indicators, and a sharp recovery in the rupee.

Key Market Highlights:• Broader Market Outperformance: Mid and small-cap stocks surged ahead, with the Nifty Midcap 150 rising 7.3% and the Nifty Smallcap 250 jumping 8.1%. • Sector Leaders: Media (+7.64%), Realty (+7.82%), and Metal (+4.85%) outperformed. • FII & DII Activity: FIIs were net sellers (-₹882.85 Cr), while DIIs absorbed the supply with net buying of ₹7,033.49 Cr.

Stock of the Week:• Top Gainers: • Garden Reach Shipbuilders & Engineers Ltd (GRSE) 🚢: +30.56% • DB Realty Ltd 🏗️: +28.71% • Nuvama Wealth Management 💰: +25.53% • Top Losers: • Castrol India (-5.89%), KEI Industries (-5.36%), CRISIL (-3.2%)

Market Outlook: Will the Rally Continue?

The positive sentiment is expected to extend into next week, driven by:
✔️ Robust FII inflows – FIIs turned net buyers with ₹6,000 Cr inflows, the highest this year.
✔️ RBI rate cut expectations – Inflation fell to a 7-month low (3.61%), boosting hopes for a rate cut.
✔️ Strong macro indicators – India’s trade deficit at a 22-month low and rising tax collections indicate economic resilience.

However, U.S. tariff concerns remain a key risk factor, though markets seem to have largely priced them in.

Key Sectors to Watch Next Week:

📌 Defence: Govt’s ₹54,000 Cr military acquisition plan is bullish for HAL, GRSE, BEL, BDL, Data Patterns.
📌 FMCG: CRISIL projects 6-8% growth in FY26; stocks like HUL, ITC, Britannia, Tata Consumer, Marico to benefit.
📌 IT: Accenture’s upbeat revenue guidance signals demand recovery – Infosys, TCS, LTI Mindtree, Coforge, Tata Elxsi look strong.
📌 Gold Finance: Bain Capital’s ₹4,385 Cr investment in Manappuram Finance signals bullish momentum for Muthoot, IIFL Finance.
📌 PSU Banks & Stocks: Strong valuation play after 25-30% correction – SBI, PNB, BOB, NTPC, IRFC, ONGC remain in focus.
📌 AC & Cooling Stocks: IMD’s heatwave forecast boosts demand for Voltas, Bluestar, Crompton Greaves.
📌 Exchange-Related Stocks: SEBI’s investment threshold reduction is positive for BSE, CDSL, CAMS.

Global Market Recap:• U.S. markets gained as the Fed kept rates steady and reaffirmed two rate cuts in 2025. • European markets flat as BoE and BoJ also held rates unchanged. • China saw investor caution amid ongoing economic challenges.

Key Global Data to Watch Next Week:

📊 U.S. – GDP, Retail Sales, PCE Inflation, PMI Data
📊 Europe – UK GDP, Retail Sales, CPI Data
📊 China – Industrial Profits, Lending Rate Decision
📊 India – Fiscal Deficit, Bank Credit, Forex Reserves

Technical View on Nifty:

Nifty is forming higher highs and higher lows, indicating a strong uptrend. For a detailed technical analysis, watch our Sunday Standpoint YouTube video.

Stay tuned for more insights!