March 3rd 2025.
The equity markets in New Delhi are expected to be influenced by developments in the US tariff policies, as well as global trends and the trading activity of foreign investors this week, according to analysts. Experts predict that the market may experience volatile trends in the coming days, as investor sentiment remains weak due to concerns over escalating trade tariffs and foreign fund outflows.
Last month, the NSE Nifty saw a significant decline of 1,383.7 points or 5.88%, while the BSE Sensex dropped 4,302.47 points or 5.55%. Since its record high of 85,978.25 on September 27, 2024, the BSE benchmark index has fallen by 12,780.15 points or 14.86%, while the Nifty has dropped 4,152.65 points or 15.80% from its lifetime high of 26,277.35.
Vinod Nair, Head of Research at Geojit Financial Services, believes that investors will closely monitor key events, such as the tariff policy and jobless claims, while expecting market conditions to remain weak in the short term. However, he foresees a gradual recovery as earnings improve from Q1 FY26 and uncertainties surrounding global trade policies subside.
Investors will also keep an eye on the HSBC manufacturing and services PMI data, which is set to be announced during the week. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, expects the market to continue to trade with weakness due to weak global sentiments and lack of domestic triggers.
Amidst these market conditions, the Indian economy saw a growth of 6.2% in the December quarter, recovering sequentially from seven-quarter lows. However, this expansion was lower than last year and comes at a time when the economy faces challenges from the threat of a US tariff war. The gross domestic product growth of 6.2% in the quarter was higher than the revised reading of 5.6% in the previous quarter, but lower than the RBI's estimate of 6.8%.
Last week, the BSE benchmark index saw a decline of 2,112.96 points or 2.80%, while the Nifty dropped 671.2 points or 2.94%. According to Ajit Mishra, SVP of Research at Religare Broking Ltd, the market is currently facing uncertainty over potential trade wars, which is weighing more heavily than the actual event. He also notes that the continuous selling by foreign institutional investors is adding pressure to the market.
On a positive note, gross GST collections rose by 9.1% to about Rs 1.84 lakh crore in February, indicating potential economic revival driven by domestic consumption. The official data released on Saturday showed that mop up from Central GST stood at Rs 35,204 crore, State GST at Rs 43,704 crore, Integrated GST at Rs 90,870 crore and compensation cess of Rs 13,868 crore.
Analyst Satish Chandra Aluri from Lemonn Markets Desk believes that the market may see a relief rally this week from oversold conditions, but overall, it is expected to be volatile with a downward bias in the near term. With Friday's losses, the market is approaching signs of capitulation.
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