Market Outlook for the Coming Week: Auto Sales, FIIs Data, and Tariff Developments to Drive Sentiment

Mumbai: The market outlook for the upcoming week is expected to be influenced by several key factors, including auto sales data, PMI (Purchasing Managers’ Index), FIIs (Foreign Institutional Investors) data, and global developments like tariff changes and geopolitical risks. According to market experts, these triggers will play a significant role in guiding market sentiment.

Key Factors to Watch: Auto Sales, PMI, and FIIs Data

As India heads into the new week, experts anticipate that auto sales and PMI data will be crucial in assessing the health of the domestic economy. Foreign institutional investors (FIIs) data will also be closely watched for any trends in foreign investment flows, which can influence market dynamics. Additionally, global factors such as tariff developments and geopolitical tensions are expected to add volatility to the markets.

Past Market Corrections Offer Hope for Long-Term Investors

Despite recent volatility, which saw Indian stock markets experience a sharp correction, experts like Krishna Appala, Senior Analyst at Capitalmind Research, believe the current market situation presents a potential opportunity. Appala noted that past market corrections during significant events such as the Lehman crash, the Taper Tantrum, demonetisation, and the Covid-19 pandemic have been viewed in hindsight as strong buying opportunities.

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“The current market correction may seem painful, but history suggests that years from now, it may lead to a boom,” said Appala.

Global Tariff Concerns Weigh on Indian Markets

The Indian stock market witnessed a decline of over 3 percent this past week, primarily due to concerns about a deepening trade war and fears of a slowing US economy. The US is expected to impose a 25 percent tariff on imports from Canada and Mexico, along with a 20 percent tariff on Chinese goods starting next week. These tariff announcements rattled global markets and contributed to a nearly 2 percent fall in key Indian indices on Friday.

Market Declines and Long-Term Prospects

Despite the recent setbacks, Appala emphasized that steep market declines are often followed by sharp recoveries. He explained that over the past 30 years, markets have fallen by more than 20 percent in multiple years but have ended positively in 22 out of those 30 years.

“Market discipline matters in tough times just as much as in strong ones. Achieving long-term returns isn’t a straight path; it includes periods of steep drawdowns and sharp recoveries,” Appala said.

Domestic Market Performance Amid Volatility

The Indian stock markets saw significant fluctuations this week. On February 24, the Sensex dropped 857 points to close below 74,000, while the Nifty lost 242.55 points, ending at 22,553.35. However, there was some relief on February 25, as the Sensex gained 147 points, though the Nifty continued its losing streak, slipping for the sixth consecutive session.

On Thursday, the market performance was mixed ahead of the monthly derivatives expiry. Financial and metal stocks saw gains, while auto and capital goods stocks faced pressure. The Reserve Bank of India’s decision to lower risk weights on bank financing for NBFCs (Non-Banking Financial Companies) and microfinance loans provided some support to stocks like Shriram Finance, Bajaj Finserv, and Bajaj Finance.

However, on Friday, the benchmark indices fell by nearly 2 percent. The Nifty closed at 22,124.70, down 1.86 percent, while the Sensex settled at 73,198.1, losing 1.90 percent.

Conclusion: A Critical Week Ahead for the Markets

With global trade concerns and domestic data in focus, investors will be looking closely at auto sales figures, PMI data, and FIIs trends in the coming week. The market may experience further volatility, but experts advise a long-term investment strategy, keeping in mind that past corrections have often led to substantial market recoveries.