Weekly Trend Report
- 29th March 2025
Week Gone By
The key equity indices posted decent gains this week, driven by foreign fund inflows and buying in blue-chip stocks, which supported the recovery in equities. The sentiment of the market remained cautions after the US President Donald Trump announced the imposition of tariffs on auto imports into the US. The Nifty 50 ended higher by 0.72% at 23,519.35, while the Sensex increased by 0.66% settling at 77,414.92. The HSBC Flash India Manufacturing PMI increased to 57.7 in March, while . the HSBC Flash India Composite Output Index slipped to 58.6 in March but managed to remain above its long run average of 54.7. Globally, Bank of Japan indicated potential interest rate hikes. The United Kingdom increased by 0.1% between October and December. Meanwhile, the private sector economic activity in the United States accelerated in March, with the S&P Global Composite PMI rising to 53.5. The Services PMI increased to 54.3, while the Manufacturing PMI decreased to 49.8.
Week Ahead
Next week, investor sentiment will be shaped by key economic data releases both domestically and globally. In India, the HSBC Manufacturing PMI Final will be announced on April 2, 2025, followed by the HSBC Services and Composite PMI on April 4, 2025. Additionally, India’s Foreign Exchange Reserves data will also be released on April 4, 2025. Globally, China’s NBS Manufacturing PMI and Caixin Manufacturing PMI will be published on March 31, and April 1, 2025, respectively. The Euro Area’s inflation data on April 1 will also be closely watched. In the US, key data including the ISM Manufacturing PMI, JOLTs Job Openings, and inflation figures will be released on April 1, with non-farm payrolls and the unemployment rate following on Friday, April 4.
Technical Overview
- Strong March Rally: Nifty surged 4.64% in March, breaking a five-month losing streak, though futures rollovers dropped to 76.09%, signaling trader caution.
- Short-Covering Boost: Open interest fell to 14.07 crore shares from 17.64 crore, indicating short unwinding and fueling bullish sentiment.
- Muted Volatility: India VIX remained stable around 13.30, but upcoming macro events like the RBI MPC meet and inflation data could trigger market swings.
- FPIs Turn Bullish: Foreign Portfolio Investors increased their Long-Short ratio from 15.19% to 39.86%, adding fresh long positions and supporting further upside.
- Key Resistance Levels: Options data shows strong resistance at 24,000-24,500, while support remains firm at 23,000-23,500.
- Technical Strength: The index has built a base at 23,000-22,700, aligning with key moving averages and strong put writing.
- Breakout Potential: A move above 24,000 could trigger an aggressive short-covering rally, pushing Nifty towards 24,500-24,800.
- Trading Strategy: As long as Nifty holds above 23,000, traders should adopt a “Buy on Dips” approach, focusing on a breakout above resistance.
- April’s Pivotal Role: Market participants should closely monitor price action this month to confirm if the bullish trend will sustain.
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