Market outlook for the week (14-Apr to 18-Apr)

15 Apr 2025 , 10:47 AM

SECTORAL STORY FOR THE WEEK TO APRIL 11, 2025

The week to April 11, 2025 saw Nifty and Sensex showing losses of -0.33% and -0.28% respectively. During the week, FPIs were net sellers in Indian equities to the tune of $(2,470) Million. Here are 20 key sectors for the week.

Sectoral Index	Weekly Returns	Index (11-Apr)	Index (04-Apr)
Nifty Consumer Durables	3.77%	36,085.30	34,772.65
Nifty FMCG	3.55%	55,741.10	53,830.70
Nifty Chemicals	2.36%	27,974.31	27,329.69
Nifty CPSE	2.27%	6,066.80	5,932.15
Nifty MNC	1.88%	25,903.45	25,426.00
Nifty Oil & Gas	1.27%	10,262.55	10,134.10
Nifty Capital Markets	1.16%	3,384.00	3,345.10
Nifty Mobility	0.67%	18,002.70	17,882.85
Nifty Non-Banks	0.49%	26,058.45	25,931.70
Nifty Infrastructure	0.22%	8,250.15	8,231.65
Nifty India Defence	0.13%	6,268.70	6,260.45
Nifty Automobiles	-0.22%	20,548.65	20,593.15
Nifty India Digital	-0.56%	7,818.10	7,861.95
Nifty Healthcare	-0.75%	13,326.65	13,426.80
Nifty Banks	-0.97%	51,002.35	51,502.70
Nifty Private Banks	-1.06%	25,388.20	25,659.85
Nifty PSU Banks	-1.53%	6,171.30	6,266.95
Nifty IT	-2.30%	32,740.85	33,511.40
Nifty Metals	-2.93%	8,168.30	8,414.45
Nifty Realty	-4.00%	790.15	823.05

Data Source: NSE

Out of 20 sectoral indices only 11 gave positive returns, while 9 gave negative returns. The negative triggers came from Trump tariffs and global slowdown fears, as well as fears of NIMs of financials narrowing as rates fall. Hence, the worst hit sectors were the likes of IT and Banks. The domestic oriented sectors dominated, with FMCG and Consumer Durables gaining from the India growth story; while oil gained from a sharp fall in crude prices. Sectors like healthcare were more in the zone of uncertainty for the time being.

Overall, the average returns of the 20 sectors stood at 0.17%. The top 10 sectors gave an average return of 1.76%, while the bottom 10 sectors delivered average returns of -1.42%. A total of 7 sectors gained more than 1% for the week, with 2 sectors gaining over 3% for the week. On the downside, 5 sectors fell more than -1% for the week, with 3 sectors falling more than 2%.

WEEK THAT WAS; THE GOOD, THE BAD AND THE UGLY

One factor that was a major boost for the market this week was the RBI policy prescription. The RBI MPC not only cut the rates by 25 bps but also shifted the stance of monetary policy from Neutral to Accommodative. At a global level, the Trump tariffs have been put on pause mode for 90 days. However, the positive impact of this move got diluted after China was kept out of the purview of this pause. Crude oil prices remained subdued this week.

Of course, the big risk on the downside this week continued to be the worsening stand-off between the US and China. The IIP for February 2025 came in sharply lower at 2.86%, from a level of 5.21%, showing stress on the exports front. What could actually spook the markets is the use of the word “Stagflation” for the first time in the FOMC minutes. The Fed is clearly apprehensive that Trump tariffs could spike inflation, dampen GDP growth, and curtail jobs.

STOCK MARKET TRIGGERS FOR COMING WEEK TO APRIL 18, 2025

Here are key triggers that could influence stock markets next week.

• With the VIX spiking by over 50% in a single day on Monday, the VIX is likely to stay above the 20 mark in the coming week too. However, it is a truncated week with just 3 trading days; so, traders could rush to lighten position, exacerbating VIX further.
• The CPI and the WPI inflation will be announced this week. WPI inflation is likely to feel the input cost pressure, but CPI inflation may stay flat at around 3.60 levels. With low food prices, low inflation may persist till the end of the monsoon Kharif season.
• The all important trade data for March 2025 and the full fiscal FY25 will also be out this week. With the net trade balance likely to be in surplus once again, the FY25 CAD may now stay under 1.2% of GDP, a comfortable situation to have.
• The coming week will be the week of big financials results. Apart from Wipro Infosys, a slew of financial majors like HDFC Bank, ICICI Bank, Yes Bank, ICICI Pru Life insurance, HDFC AMC, HDFC Life, ICICI Lombard, and HDFC Life will announce Q4 and FY25 results.
• Key global data points. FOMC speak, consumer inflation expectations, crude inventories, IIP, retail sales, Atlanta Fed GDP, building permits and initial jobless claims (US). IIP, CPI, ECB Speak (EU); Trade Balance, CPI, IIP (Japan); New Loans, Trade Balance (China); and Jobs, CPI, BOE Credit (UK).

What does this mean for Nifty and Sensex in the coming week to April 18, 2025.

PARTING THOUGHTS ON MARKET INDEX LEVELS

VIX spiked from 13.76 levels to 23.35 levels in a single week; and with a truncated week coming up, the VIX could face more upside pressure.

• Nifty closed the week at 22,829 Spot. Nifty has immediate support at 22,708 and major support at 22,480. Immediate resistance is at 22,937 and later at 23,165. Nifty stays a long play till it decisively breaks below 22,427 with volumes. Shorts only after that.
• Sensex closed the week at 75,157 Spot. Sensex has immediate support at 74,791 and major support at 74,086. Immediate resistance is at 75,495 and later at 76,200. Sensex is a long play, till it breaks below 73,870 with volumes. Shorts have to wait till then.

More than the data flows, the next week will be about news flows like reciprocal tariffs timetable, China stand-off, crude oil prices etc and the impact on VIX. It is another truncated week of trading, so markets could remain volatile in a range!