Markets Ahead: Tariff-Related Developments And Trading Activity Of FIIs To Remain In Focus, Say Analysts

The experts said that the equity markets will be influenced by economic indicators, cues from US market, and activity of foreign institutional investors (FIIs) in the coming week.

With no major domestic economic events on the calendar, focus will remain on the expiry of March derivatives contracts and FII trading patterns, an analyst pointed out.

Source : Freepik

Investors will be on the lookout for fluctuations in the trends in the global markets and updates related to tariff policies from different countries, analysts noted. The experts said that the equity markets will be influenced by economic indicators, cues from US market, and activity of foreign institutional investors (FIIs) in the coming week.

The Indian equity markets clocked a sharp recovery last week as benchmark indices rallied more than 4 per cent. Experts explained that this surge was driven by an improvement in sentiment among investors, better foreign capital flows, and favourable cues on the global front, reported PTI.

The BSE benchmark index, Sensex, gained 3,076.6 points, marking a 4.16 per cent increase, while the Nifty jumped 953.2 points, up 4.25 per cent last week.

“We expect this upward momentum to continue, on the back of foreign institutional investors' return to the Indian market amid attractive valuations and signs of economic recovery,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Key Factors to Watch This Week

With no major domestic economic events on the calendar, focus will remain on the expiry of March derivatives contracts and FII trading patterns, an analyst pointed out. Additionally, investors would monitor movements in the rupee against the US dollar and fluctuations in Brent crude oil prices.

On the international front, market participants will keep a close watch on the US, where tariff-related updates and GDP growth data could impact sentiment. Although the US markets saw a temporary rebound after a steep decline, mixed signals suggest the possibility of volatility ahead, noted Ajit Mishra, SVP, Research, Religare Broking Ltd.

“FIIs, whose selling activity has been waning, are becoming net buyers, driven by dovish signals from the US Fed, which suggest the possibility of two rate cuts this year. This has reignited optimism in the domestic market,” said Vinod Nair, Head of Research, Geojit Financial Services.

According to exchange data, FIIs purchased equities worth Rs 3,239.14 crore on Thursday, followed by additional buying of Rs 7,470.36 crore on Friday.