Week Ahead: Reciprocal tariffs, auto sales, Q4 updates, FII flow among key triggers for Indian stock market

The Indian stock market closed the 2024-25 (FY25) financial year with gains after logging sharp gains in March driven by foreign capital inflow, final phases of profit booking, and improving domestic economic indicators.

Next, investors will monitor key market triggers in the first week of the new fiscal (FY26). Donald Trump‘s reciprocal tariff announcements, foreign fund inflow, domestic and global macroeconomic data, auto sales figures, and global market cues will dictate the market direction in the first week of April, marking the beginning of the new financial year 2025-26 (FY26).

Domestic equity benchmarks Sensex and Nifty 50 extended their winning streaks for the second consecutive week. The Nifty 50 and BSE Sensex initially surged to an 11-week high before paring gains due to higher-level profit booking. By the end of the week, the benchmark indices—Nifty and Sensex—closed at 23,519.30 and 77,414.92, respectively.

Also Read: Nifty 50 logs best jump in 15 months after historic five-month losing streak: What should be your trading strategy now?

“A key technical highlight was that all major indices closed above the cluster of crucial moving averages, including the 21, 55, 100, and 200-day EMAs. The market’s upward trajectory was primarily driven by technical buying and value accumulation near key demand zones rather than any significant fundamental developments,” said Puneet Singhania, Director at Master Trust Group.

On the weekly front, the BSE benchmark gauge climbed 509.41 points or 0.66 per cent, and the Nifty went up by 168.95 points or 0.72 per cent. After a stellar show in the 2023-24 (FY24) fiscal, stock markets had a roller coaster ride in FY25. In FY25, the BSE bellwether gauge jumped 3,763.57 points or 5.10 per cent, and the NSE Nifty climbed 1,192.45 points or 5.34 per cent.

“The final week of the current financial year opened on a strong note but ended flat as investor sentiment weakened following the announcement of automobile tariffs. Despite steady inflows from institutional investors, the market struggled to sustain its momentum,” said Vinod Nair, Head of Research at Geojit Investments Ltd.

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“Gold prices surged to record highs as investors sought safe-haven assets amid escalating trade tensions. The upcoming week will offer greater clarity on tariff developments, enabling investors to assess their impact on the global economy…Investor focus is shifting toward quarterly earnings reports, which are anticipated to provide a clearer picture of earnings recovery,” said Nair.

This week, the primary market will witness a subdued trend with no new initial public offerings (IPO) and only a few listings slated across the mainboard and small and medium enterprises (SME) segments. The holiday-shortened week will be critical from the domestic and technical points of view. Investors will track domestic and global macroeconomic data.

Here are the key triggers for the Indian stock market in the coming week:

Macro data, Auto sales

India’s HSBC Composite PMI data for March is set to be released on Friday, April 4, with a projected value of 58.6. A reading stronger than expectations could signal strong economic expansion, influencing investor sentiment and market trends. Monthly auto sales figures for March will keep auto stocks in focus.

No new IPOs, 4 new listings to hit D-Street

There will be no new public issues in the mainboard or SME segment in the upcoming week. However, three new SMEs are scheduled to be listed on either BSE SME or NSE SME.

FII Activity

A major boost to the market’s sentiment last week came from foreign institutional investors (FIIs) returning as net buyers, injecting ₹17,426 crore into the cash segment, while domestic institutional investors (DIIs) added ₹6,797 crore, further fueling the rally.

“The change in FII strategy from sustained selling to modest buying, which was visible in the week ending March 21, continued with increased intensity for the week ending March 28,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd.

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Big buying by FIIs during the last several days of March substantially reduced the total FII selling to ₹6,027 crore. Since FIIs invested ₹2,055 crore through the primary market, the net FII sell figure for March is down to only ₹3,972 crore.

According to Dr VK Vijayakumar, the following reasons prompted FIIs to turn buyers:

-The valuations turned attractive after around 16 per cent correction from the September 2024 peak.

-⁠Recent appreciation in the rupee led to a reversal of the momentum trade towards US investment.

-India’s macros – GDP, IIP and CPI inflation- improved, paving the way for a rally in the market.

“Going forward, the trend in FII flows will depend mainly on Donald Trump’s reciprocal tariffs, which are expected on April 2. If the tariffs are not severe, the rally may continue,” added Dr VK Vijayakumar.

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According to Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India, “Turning the tide this week, FPI inflows have started in green, bringing back the cheer in the Indian market despite the last week of the financial year, which usually witnesses substantial profit booking.

“The last few trading sessions have been gloomy and volatile for the Indian market. Some of the primary reasons on the macroeconomic front were the US making announcements about the imposition of reciprocal tariffs, Middle East tensions, rising inflation, low consumption, and higher valuations,” added Purohit.

Global Cues, Reciprocal tariffs

With the upcoming holiday-shortened week, market participants will turn their attention to global developments in the absence of major domestic triggers. The implementation of reciprocal tariffs from April 2 and its broader implications on global trade will be closely monitored.

Global markets are set to be volatile this week, driven by India-US tariff policy developments, the impact of US President Donald Trump’s announcement of a 25 per cent tariff on finished vehicle imports effective April 3, 2025, and the speech of US Fed Chair Powell.

The US JOLTS Job Openings (February) data figures will be released on April 1. China’s Caixin Manufacturing PMI for March, estimated at 51, will be released, providing insights into the condition of the country’s industrial sector.

Key US economic data, including the Composite PMI and initial jobless claims for March, will be released on Thursday, April 3. The US Global Composite PMI output index, a weighted average of the Manufacturing Output Index and the Services Business Activity Index, is projected to be 53.5, significantly higher than the previous reading of 51.6.

Also Read: Oil logs third weekly gain after US tariffs put pressure on Venezuelan crude; Brent, WTI gain 6-7% in March

The UK S&P Global Composite PMI is also scheduled for April 3. On April 4, the US average hourly earnings, non-farm payrolls, and unemployment rate for March will be released, providing insights into the US job market. US Federal Reserve Chair Powell will deliver a speech which will be closely analysed for the US Fed’s future monetary policy stance and economic outlook.

“Notably, despite favourable macroeconomic data, US markets edged lower, reflecting ongoing uncertainty regarding the impact of tariff wars. Investors remain wary of rising inflationary pressures, which could limit the US Federal Reserve’s ability to moderate interest rates,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.

Corporate Action

Shares of United Spirits, Varun Beverages, MSTC, DCM Shriram Industries, among others will trade ex-dividend in the coming week. Shares of some stocks will also trade ex-bonus. Check full list here

Technical View

From a technical perspective, Nifty 50’s decisive breakout could open the door for a rally towards 24,100, whereas a breakdown may extend the consolidation phase, with the next major support at 23,100. Read full technical analysis here

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.