India’s stock markets started the week on a positive note, with Sensex and Nifty opening higher on Monday. This uptick came as investors reacted to softer-than-expected inflation data from the U.S. and India, boosting overall sentiment. The Nifty 50 stayed above the 22,480 mark, while the Sensex gained 310.21 points (0.42%), reflecting renewed optimism.

However, the markets had a rough close last week. On Thursday, the BSE Sensex dropped 200.85 points (-0.27%) to settle at 73,828.91, while the NSE Nifty50 declined by 73.30 points (-0.33%) to 22,397.20. This indicated an overall weak sentiment throughout the week.

Key Market Trends and Technical Analysis

Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, noted that Nifty50 has been consolidating within a 22,300–23,700 range.

“It is encountering resistance near the bearish gap of 22,668–22,720. As long as the index holds above 22,300, a pullback towards 22,600–22,700 remains possible. However, if Nifty breaches 22,300, the weakness could extend towards the 22,000 level,” Yedve stated.

Investors are closely tracking key support and resistance levels, especially as global markets remain volatile.

Global Factors and Valuation Adjustments

Indian equities continue to be affected by global sentiment, which has been weak in recent weeks. Additionally, market valuations are moderating, influencing short-term trading strategies.

As markets reopened after the holiday break, investor attention shifted toward sectoral movements and overall market momentum.

Sectoral Performance: Pharma and Auto Lead the Gains

Several sectors performed well in early trade on Monday, contributing to the overall bullish sentiment.

Top Gaining Sectors:

Nifty Pharma: +1.53%
Nifty Auto: +1.30%
Nifty Financial Services 25/50: +1.04%
Nifty Bank: +0.57%
Nifty Metal: +0.77%
Nifty Private Bank: +0.64%
Nifty PSU Bank: +0.28%
Nifty FMCG: +0.23%
Nifty Media: +0.14%

Lagging Sectors:

Nifty IT
Nifty Realty
PSU Bank stocks

Technology and real estate sectors struggled to gain momentum, facing downward pressure during the session.

What’s Driving the Market Rally?

According to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, the current rally is driven by strong domestic economic data and positive global cues.

"Asian cues are positive, which is creating optimism in the Indian markets," Bathini noted.

He added that as long as Nifty remains above 22,500, it could potentially attempt to reach 23,000 in the medium to short term.

Economic Indicators Supporting Market Sentiment

Strong economic fundamentals have provided support for India’s stock markets.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted three key factors:
Foreign Institutional Investor (FII) outflows are slowing down
India’s markets have outperformed US markets in the past week
Economic indicators like GDP growth and inflation are stable

According to him, the FY25 Q3 GDP growth rebounded to 6.2%, while January’s Industrial Production Index (IIP) surged to 5%. Additionally, February’s Consumer Price Index (CPI) inflation dropped to 3.61%, signaling economic stability.

“The near-term market trend is likely to be stable with a positive bias,” Vijayakumar added.

Risks and Challenges Ahead

Despite the ongoing rally, experts warn that global risks could impact market stability.

Dr. Vijayakumar pointed to potential trade tensions and tariff concerns:

"The April 2 tariff deadline is approaching, and trade war fears are looming over global markets."

India has previously been labeled a ‘tariff king’ and ‘tariff abuser’ by former U.S. President Donald Trump. If new export tariffs are imposed, Indian export-driven sectors could face pressure.

However, domestic consumption sectors remain relatively stable, as they are less affected by global trade policies.

The Indian stock market opened higher on Monday, tracking positive global cues and strong domestic economic data. While pharma and auto stocks surged, IT and realty stocks underperformed.

With Nifty 50 holding above 22,480 and Sensex gaining over 300 points, investors are closely monitoring support and resistance levels for future movements. However, global trade tensions and tariff issues could pose risks in the coming weeks.

For now, markets remain stable with a positive bias, and experts believe that Nifty could aim for 23,000 if the momentum sustains.