Consolidation More Likely With Mild Upward Bias

The turbulence in global stock markets following President Trump’s reciprocal tariffs has been impacting FII investments in India too. A clear pattern in FII strategy will emerge only after the ongoing chaos dies down. In the medium term FIIs are likely to turn buyers in India since both the US and China are heading for an inevitable slowdown as a result of the ongoing trade war

Amidst one of the wildest weeks in the market history across the globe and the most volatile stretch since the Covid-19 meltdown; the Indian benchmark indices ended with marginal losses in the volatile during the last truncated week. US bond selloff sent yields surging and a steep slide in the dollar rattled investors driving gold to new records. An unexpected pause on reciprocal tariffs by the US president provided some relief to the investor on the final day of the week. For the week, BSE Sensex index fell 207.43 points or 0.27 percent to end at 75,157.26 points, and NSE Nifty declined 75.9 points or 0.33 percent to close at 22,828.55 points. Tracking the benchmark indices, the BSE Mid-cap Index shed 0.5 percent and the BSE Small-cap index ended marginally lower. FIIs extended their selling-by-selling equities worth Rs20,911.30 crore, while DIIs bought equities worth Rs21,955.62 crore. It is pertinent to observe that FIIs extended their selling spree for nine successive sessions taking the monthly outflows to Rs31,575 crore. They have been sellers in each of the previous three months and have offloaded domestic shares worth Rs1,48,149 crore. The turbulence in global stock markets following President Trump’s reciprocal tariffs has been impacting FII investments in India too. A clear pattern in FII strategy will emerge only after the ongoing chaos dies down. In the medium term FIIs are likely to turn buyers in India since both the US and China are heading for an inevitable slowdown as a result of the ongoing trade war. The Indian rupee ended lower against the US dollar as it fell 82 paise at 86.05 per dollar. Traders described scenes of tension, where the rapid surges and dives made it difficult to determine the prices of various investments. And the sheer violence of the moves left many exhausted and bracing for more trouble ahead. On the sectoral front, Nifty Realty index shed four per cent, Nifty Metal index down three per cent, Nifty IT index declined 2.3 per cent, Nifty PSU Bank index shed 1.5 per cent. On the other Nifty Consumer Durable and FMCG added more than three per cent each. IIP slowed in February with growth declining to a six-month low of 2.9 percent in February from 5.2 per cent in the previous month. The deceleration was broad-based, with all the use-based categories, as well as two of the three sectors barring electricity, witnessing a slower growth in February 2025 vis-à-vis the previous month. March is unlikely to show a different trend, according to economists. The March 2025 quarter results (Q4 FY25) season began on a cautionary note. Sequential constant currency revenues declined at Tata Consultancy Services (TCS) in Q4 due to increased business uncertainty and tight customer controls over discretionary spending. More cues on the global demand environment will emerge next week. Infosys and Wipro are scheduled to release their March quarter results. Other key results to watch in coming week are from ICICI Prudential Life Insurance, Waaree Renewable Technologies, HDFC Life Insurance, HDFC Bank, ICICI Bank and Yes Bank. With Monday being a holiday, Tuesday will see the markets opening after a gap of one day and adjusting to the global trade. With April 18th a holiday on account of Maharashtra Day and only three trading days in next week; the domestic markets may see consolidation with mild upward bias.

Follow market trends and history. Don’t speculate that this particular time will be any different. For example, a major key to investing in a specific stock or bond fund is its performance over five years.

F&O/ SECTOR WATCH

Tracking the volatility that began after Trump shocked investors, economists, business leaders and trade partners with a barrage of tariffs that were far steeper than anyone expected; heightened volatility was seen in the derivatives segment and several stock futures witnessed sharp swings both ways on news flow. In the options segment, prominent Call Open Interest was seen at 23,000 strike and prominent Put Open Interest was seen at 22,500 strike. For Bank Nifty, prominent Call Open Interest was at 52,000 and prominent Put Open Interest was at 51,000 and 50,000 strikes. Implied Volatility (IV) for Nifty Call options settled at 20.21 per cent and for Put options at 21.32 per cent. The Put Call Ratio of Open Interest for the week was 1.06. The volatility spiked; the India VIX surged sharply by 46.18 per cent to 20.11 on a weekly basis. The trend appears bearish unless Nifty decisively moves above 23,000, where significant Open Interest has been added. On the downside, support is placed at 22,750; a break below this level could intensify the bearish sentiment. Conversely, a decisive move above 23,000 may trigger a rally towards 23,500, as suggested by the positive divergence in the RSI say techies. Depending on global cues, markets may continue to decline but the Indian equities are set to outperform its global peers relatively. With Q4 results on radar, expect sharp stock specific moves to continue in the coming week. Stocks looking good are Apollo Tyres, Grasim, Hudco, IDFC First, Paytm, Powergrid, Torrent Power and NCC. Stocks looking weak are Coforge, Godrej Properties, IGL, ICICIGI, Persistent and Polycab.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)

STOCK PICKS

NCC Ltd

NCC Ltd is engaged in the infrastructure sector and undertaking turn-key engineering, procurement and construction (EPC) contracts. The company is focused on the construction of industrial, institutional, hospital, hospitality and commercial buildings, airports, housing projects, transportation projects, including roads, bridges, flyovers, metros and tunnels, water supply and environment projects, railway projects, electrical distribution, transmission lines and smart meter projects, irrigation projects, mining projects. Its Construction Segment comprises engineering and construction of industrial, commercial, residential and other buildings. roads, bridges, flyovers, water supply and environment projects, railways, metro corridors, mining, power transmission and distribution lines, irrigation. Its Real Estate Segment comprises its real estate development / real estate construction business. Its Others Segment consists of BOT Projects. The company entered the smart meters segment, securing three major projects worth Rs8,080 crore. The company started field trials for the Bihar project and plans to start trials for the Maharashtra packages. The order book of the company after bagging the prestigious contracts in Amaravati-new capital of the state of Andhra Pradesh is over Rs0,000 crore. The company’s net worth has increased to nearly Rs7,500 crore. Buy for medium term target of Rs400.