WPI Inflation, US Fed rate decision, FIIs activities among key market triggers for next week

Mumbai: The market outlook for the upcoming week will be shaped by a combination of global and domestic factors, including India’s Wholesale Price Index (WPI) inflation data, Foreign Institutional Investors (FII) activity, the US Federal Reserve’s interest rate decision, and US initial jobless claims, among other economic indicators.

Nifty and Sensex Decline Amid Market Volatility

Between March 10-13, both the Nifty and Sensex indices experienced losses. Nifty fell 147.50 points, or 0.65%, closing at 22,397.20, while Sensex dropped 511.18 points, or 0.69%, to end at 73,828.91. The market was closed on March 14 due to the Holi festival.

Midcap and small-cap stocks faced significant selling pressure, underperforming large-cap stocks. The Nifty Midcap 100 index dropped by 1,223 points, or 2.48%, to 48,125.10, and the Nifty Smallcap 100 index fell 503 points, or 3.27%, to 14,897.35.

Sectoral Performance and Global Sentiment

The IT sector led the decline, followed by banking and new-age technology sectors. The global market sentiment remained uncertain, influenced by concerns surrounding US President Donald Trump’s tariff policies. This uncertainty prompted investors to adopt a cautious approach, leading to a lackluster trading session.

Persistent outflows from Foreign Institutional Investors (FIIs) and concerns over the potential impact of US tariffs on Indian companies further dampened market confidence, raising questions about the outlook for Q4 earnings. During this period, FIIs recorded net outflows of Rs 5,729 crore in the cash segment, while Domestic Institutional Investors (DIIs) provided some stability with inflows of Rs 5,499 crore.

Technical Outlook for Nifty

Puneet Singhania, Director at Master Trust Group, analyzed the current market scenario, stating that the Nifty closed the week in the negative territory but is currently trading above its 100-week Exponential Moving Average (EMA), which is near 22,000. However, the index is still below its 21-day EMA. Immediate support for Nifty is at 22,300, and a breach of this level could trigger further selling toward 22,000. On the upside, 22,630 is a crucial resistance level, and a breakout above this level could push the index higher towards 22,800.

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Singhania maintained a bearish outlook, which will likely persist unless the index decisively closes above the 21-day EMA.

Key Market Triggers to Watch Next Week

Investors are advised to keep an eye on key market triggers next week, including India’s WPI inflation data, the US Fed’s interest rate decision, and ongoing FII activities. Any developments in these areas could significantly impact market sentiment and guide trading strategies.

Stay tuned for updates and detailed analysis as the market navigates through these critical factors.