Trump’s Tariff Decision To Set Tone For Market Trend

The March 27- April 2 period consisted of four trading sessions comprising the last trading day for FY2025 and March F&O expiry. It was eventful and volatile. At the end of it all, BSE Sensex lost 671.06 points or 0.87 per cent to close at 76,617.41 points, while Nifty lost 135.45 points or 0.76 per cent to close at 23,290.00 points. Markets gained on two of the four trading sessions and lost on two.

Dow Jones lost on four of the five trading sessions and gained on just one. It was down 597.54 points or 1.40 per cent to close at 41,989.96 points. US president, Donald Trump would have announced reciprocal tariffs on the whole world by the time you read this article. Implications would be known in the next 24 hours. What happens is debatable, but suffice to say that the US citizen would have to pay more and his life would become that much more difficult hereon.

March futures expired on a positive note. The series gained 1,046.90 points or 4.64 per cent to close at 23,591.95 points. The financial year 2024-2025 has come to an end and it’s a good time to see how markets fared in the financial year.

The benchmark indices saw BSE Sensex gain 3,763.57 points or 5.11 per cent to close at 77,414.92 points. Nifty gained 1,192.45 points or 5.34 per cent to close at 23,519.35 points. In contrast the outperformer was BANK Nifty, which gained 4,440.25 points or 9.42 per cent to close at 51,564.85 points.

NSE Mid-Cap ended the year with gains of 1,035.10 points or 7.65 per cent to close at 14,561.60 points while NSE Small-Cap gained 825.25 points or 5.40 per cent to close at 16,095.70 points. BSE Mid-Cap gained 2,208.97 points or 5.62 per cent to close at 41,531.12 points, while BSE Small-Cap gained 3,471.79 points or 8.04 per cent to close at 46,638.13 points.

It would be interesting to note that in a mere 14 trading sessions in March, Nifty gained 1,900 points while BSE Sensex gained 6,100 points. Theoretical point, that if this March-end rally had not happened, returns from the financial year would have been negative. Food for thought and the thinking gets scary. Who was behind the rally, what drove markets and so on and so forth. Plenty of questions with little or no answers.

The April 3-9 period sees RBI meet for its first bi-monthly policy review meeting between April 7-9, where it is widely believed or expected that rates would be cut by 25 basis points. This could act as a booster to markets depending on what happens on Wednesday night in the US as far as reciprocal tariffs.

Our markets have made some support at levels of 23,000 points on Nifty and levels of 74,600 on BSE Sensex. While these would act as solid support, we have support at higher levels of 23,200 and 75,200 points respectively. Resistance is at the high made last week on Tuesday at levels of 23,800- 23,900 and at 78,500-78,800 respectively. The sharp volatility one witnessed on Tuesday could make these levels vanish in next to no time. Yet they appear quite reliable for the time being.

The strategy would be to analyze what Trump’s reciprocal tariffs have in store for India, the US and the world. They would in all probability have far reaching implications. Moreover, changes coming post announcement are also possible considering it is Trump making the announcements. Looking at the way gains made in Mid-cap and Small-cap simply vanished in FY25, it makes sense to remaininvested currently in the large-cap space. There exists plenty of comfort in this space. It’s better to trade extra cautiously for two days till tariff impact sinks in.

(The author is the founder of Kejriwal Research and Investment Services,

an advisory firm)