by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd
Market Summary
Markets ended the truncated week with notable gains, extending their uptrend for the second consecutive week, supported by easing geopolitical tensions and improving risk sentiment. Optimism surrounding a potential US–Iran peace agreement underpinned market confidence, while stable domestic fundamentals further aided momentum. Despite intermittent volatility, the indices maintained an upward bias, with broader markets outperforming the frontline indices. Consequently, both benchmark indices—the Nifty and Sensex—gained over 1% each to close at 24,353.55 and 78,493.54, respectively.
Key Market Drivers
Global developments remained a key influence, with easing tensions between the US and Iran and expectations of a potential peace agreement supporting investor sentiment. However, lingering uncertainty around the geopolitical situation continued to keep markets sensitive to movements in energy prices and global risk cues.
On the domestic macro front, inflation trends showed an uptick. CPI inflation rose to 3.4% in March 2026 from 3.21% in February, driven by higher food prices. Wholesale inflation also accelerated sharply to a 38-month high of 3.88%, led by rising prices of crude petroleum, fuel, and manufactured goods, indicating building cost pressures.
External sector data provided some relief, with India’s trade deficit narrowing to $20.67 billion in March from $27.1 billion in February, supported by higher exports and a decline in imports.
On the growth front, the IMF marginally raised India’s GDP growth forecast for 2026 to 6.5%, citing strong domestic demand and carryover momentum, while cautioning about potential risks from geopolitical tensions and rising global inflation.
Sectoral Snapshot
Sectoral performance remained broadly positive, with strong participation across segments, barring the auto sector. Among the top gainers, energy, metals, and realty posted healthy gains, followed by the FMCG and IT segments.
Broader markets outperformed the benchmarks, with the midcap index rising around 3.5% and the smallcap index gaining approximately 4.3%, reflecting improved risk appetite and wider market participation.
Key Events to Watch
The upcoming week will be crucial, with both global and domestic developments likely to guide market direction. Geopolitical developments in the US–Iran conflict will remain a key monitorable, given their direct impact on crude oil prices and global risk sentiment.
On the domestic front, focus will shift to the ongoing Q4 FY26 earnings season. Market participants will initially react to results from banking heavyweights such as HDFC Bank and ICICI Bank. Subsequently, several key companies—including HCL Technologies, Infosys, Tech Mahindra, Havells, IndusInd Bank, M&M Finance, and Shriram Finance—are scheduled to announce their results. Earnings commentary, particularly on margins and demand outlook, will be closely tracked.
On the macro front, infrastructure output data for March will be released on April 20, followed by Manufacturing, Services, and Composite PMI data for April on April 23, providing insights into economic momentum.
Technical Outlook
Nifty: The index has extended its recovery and is now approaching key moving averages (100 and 200 DEMA) in the 24,600–24,800 zone. Sustained strength above this band could open room for further upside towards 25,200. In case of profit booking or consolidation, the 23,700–24,000 zone is likely to provide strong support.
Bank Nifty: The banking index is trading in line with the broader market and has already entered the zone of key moving averages. A decisive move above 57,200 could further accelerate momentum towards 59,000. On the downside, immediate support is seen in the 53,800–55,000 zone.
Market Breadth: Market breadth remained strong, with broader indices outperforming the benchmarks. The outperformance of midcap and smallcap segments indicates improving risk appetite and broader participation, although elevated volatility suggests a selective approach.
Strategy Ahead
Given the improving sentiment alongside persistent global uncertainties, investors should maintain a balanced and selective approach. Portfolio allocation may remain tilted towards fundamentally strong large-cap stocks, while selectively participating in broader market opportunities.
Sectorally, energy and metal & mining sectors may continue to outperform, while other sectors could participate on a rotational basis. Emerging themes such as railways and fertilisers are showing signs of recovery; however, it remains premature to call a sustained reversal. Caution is warranted in sectors exposed to rising input costs and global commodity volatility.
Traders should remain disciplined, avoid excessive leverage, and focus on stock-specific opportunities. With volatility likely to persist amid geopolitical developments and the earnings season, a hedged approach and strict risk management—especially for overnight leveraged positions—will be essential.
