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Below the Quote on Weekly Note March 29 by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd

Markets Trade Range-Bound, Settle Marginally Higher

The Indian equity markets remained range-bound throughout the week, ultimately closing with modest gains as they digested the sharp rebound from the previous week. The initial positive momentum was met with profit-taking in subsequent sessions, limiting further upside. By the end of the week, the benchmark indices—Nifty and Sensex—closed at 23,519.30 and 77,414.92, respectively.

Key Market Drivers

Resurgence in foreign investor interest played a crucial role in supporting the markets, as evidenced by increased buying in the cash segment and short-covering in derivatives. However, volatility persisted due to ongoing speculation regarding US tariffs, which impacted global sentiment and tempered momentum in domestic markets.

Sector-wise, banking and financials continued to outperform, providing stability, whereas pharma, auto, and realty witnessed some profit booking. Meanwhile, thematic plays like defense and public sector undertakings (PSUs) remained in focus, along with sustained participation in midcap and smallcap stocks.

Key Events to Watch

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.

Notably, despite favorable 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.

Technical Outlook

Nifty continues to consolidate within a narrow range of 23,400-23,800, while staying above key support levels marked by the 100- and 200-day exponential moving averages (DEMA). A 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.

The banking index outperformed the broader market, posting nearly 2% gains amid consolidation. The 50,700 level, which previously acted as resistance, has now turned into a key support. The index is expected to gradually move towards 52,800, with 53,900 as the next upside target.

Strategy: Buy on Dips

Traders should maintain a “buy on dips” strategy, prioritizing sectors with sustained strength. Banking and financial stocks remain our top picks, while selective opportunities can be explored in other sectors and broader market as well. However, caution is advised in IT stocks, which signal potential underperformance in the near term.

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