Stock market weekly wrap: Sensex, Nifty 50 rebound; What to expect from Indian stock market next week?

Indian stock market: After moving in downward trajectory for three weeks, the Indian benchmarks made a strong comeback in the first week of March 2025. The indices closed in green, rising nearly 2 per cent on Friday, March 7. The Nifty settled at 22,552.50, while the Sensex closed at 74,332.58, marking a significant rebound.

The market recovered despite weak global cues amid rising threat of tariff wars on multiple trading partners.

The global sentiment improved following reports of a delay in U.S. tariffs and the possibility of further negotiations, which helped stabilize financial markets. Additionally, a weaker dollar and a decline in crude oil prices further boosted investor confidence.

On the domestic front, Reserve Bank of India (RBI) announced its decision to infuse liquidity into the system added to the positive momentum.

The combination of these factors led to a broad-based rally across sectors, with metal, energy, and pharmaceutical stocks emerging as the top gainers. The broader indices also posted impressive gains, rising between 2.6 per cent and 5.5 per cent

Key driving factors for Indian stock market next week

Next week, the market will witness a shortened trading week as it will remain closed on Friday, March 14, on account of Holi. Investors or market participants will closely monitor key factors including fresh updates on tariff negotiations, geopolitical tensions, and their impact on the movement of the U.S. dollar and crude oil prices.

“Next week will be a truncated one owing to holiday on Friday due to Holi. We expect global cues along with inflation data from US and India to be closely tracked and to drive the overall investor sentiments. Additionally, non-farm payroll data from US and further development on the tariff front will also be closely watched,” brokerage firm SBI Securities said in its report titled ‘Weekly Wrap’.

For the week, FIIs net sold equities worth ₹25,247 crore while DIIs net bought ₹18,631 crore of equities in the cash market. “Foreign Institutional Investors (FIIs) have slowed their selling in cash markets, but any shift in their stance will remain a crucial indicator for market direction. On the macroeconomic front, the release of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data will also be closely tracked,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

Technical Outlook for Nifty50

According to Mishra, the Nifty50 index is likely to move towards 23,200-23,400 range in the coming week, if market sentiments remain positive.

“From a technical perspective, Nifty faces a crucial hurdle at its 20-day Exponential Moving Average (DEMA) near 22,700. A sustained move above this level, supported by banking stocks, could push the index towards the 23,200-23,400 range. However, a close below 22,250 may stall the recovery and lead to a retest of the key support zone between 21,800 and 22,000,” Mishra added.

Similarly, Bank Nifty is anticipated to propel towards 50,000 mark. “ In the banking sector, a decisive breakout above 49,000 on the Bank Nifty—its 20 DEMA—could provide the necessary momentum to propel the index toward the 50,000 mark,” he said.

SBI Securities said that the large cap quality stocks will be preferable over smallcap stocks next week. “Technically, the index is likely to continue its pullback rally in the next couple of trading sessions. Talking about crucial levels, the zone of 22,670-22,700 will act as an immediate hurdle for the index as it is the confluence of 20-day EMA and 38.2 percent,” the brokerage firm said.

It further added that if the index sustains above the 22,700 level, then it may witness an extension of the pullback rally up to the level of 23,000, followed by the 23,300 level in the short term. On the downside, the zone of 22,300-22,250 is likely to provide a cushion in case of any immediate decline.

What should be your trading strategy for next week?

Stock market experts are remaining cautiously optimistic on the market due to recent recovery. However, the market is expected to remain volatile in the coming week with key global and domestic events lined up.

Experts further recommend investors to stay vigilant amid volatility in the market and should focus on stock selection.

“Given the prevailing scenario, investors are advised to maintain a positive yet cautious approach. Stock selection should focus on companies demonstrating relative strength and strong upside potential. The broader indices have approached their initial resistance levels, making it prudent to limit aggressive positions and avoid adding to loss-making trades at this juncture,” said Mishra of Religare Broking.

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.