Equity markets to sustain gains ahead of FY25 closing

Domestic markets are expected to sustain the gains this week, the last one of this fiscal and which will also see settlement of F&O expiry of March series on the NSE.. Analysts expect volatility due to the derivative market. According to them, global sentiment will drive the market direction given the lack of domestic cues.

Ajit Mishra – SVP, Research, Religare Broking Ltd, said: With no major domestic economic events scheduled, focus will remain on the expiry of the March derivatives contracts and FII activity. On the global front, the US markets will be closely watched, with tariff-related updates and GDP growth data expected to influence investor sentiment. Although US markets saw a temporary respite after a sharp decline, mixed signals suggest potential volatility in the coming sessions., he added.

Also read: Stocks that will see action today: March 24, 2025

Gift Nifty up

Nifty futures trading at Gift Nifty at 23,490 indicates another 100 points gain for Nifty at open.

Market experts see the return of foreign portfolio investors into Indian stocks. After prolonged selling since September 2024, FPIs have shown the first signs of a change of hearts.

Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investment Services, said: “The recent reversal in FII selling has turned market sentiments for the better, facilitating a rally in the market for the week ended March 21, 2025. It can be argued that positive domestic fundamentals like a pick-up in growth and a decline in inflation, coupled with weakness in the dollar, have contributed to the change in FII strategy.”

Negatives discounted: Motilal Oswal Private wealth

According to the March 2025 Alpha Strategist Report by Motilal Oswal Private Wealth (MOPW), equity markets remained in the correction zone during February 25, with selling witnessed across market segments. Amid the continuation of uncertainty due to various factors like the imposition of tariffs by the US, measures deployed by China to revive its economy, and a stronger dollar, the markets are likely to remain in a corrective/ consolidation phase in the near future as well. Corporate earnings for Q3 have also failed to revive sentiment. However, Q3FY25 GDP has shown some signs of recovery in economy.

MOPW believes clarity on these fronts will emerge gradually and markets are likely to factor in this during the first half of the year. From a longer term perspective, India continues to remain stable and a growing economy. MOPW believes that recent announcements by the government to boost consumption are also likely to further benefit the economy. Due to the correction, valuation of large caps (Nifty 50) has fallen below the 10-year average on a 1-year forward PE basis, while the mid- and small-caps still trade at a decent premium.

During the current phase, it is advisable to tread with caution by adopting a strategy which is balanced and resilient. Based on their risk profile, investors with the appropriate level of equity allocation can continue to remain invested.

Traders are advised to adopt a “buy on dips” strategy, focusing on sectors that have demonstrated consistent strength. Banking, financials, metals, and energy stocks remain preferred picks, while selective opportunities can also be explored in PSU and auto stocks. Given the sharp rebound in the broader markets, midcap and smallcap stocks may offer potential trading opportunities, though aggressive positioning should be avoided, added Mishra.

Overall, market sentiment remains positive, but investors should remain cautious and closely monitor key technical levels and global cues for further direction.

SBI Securities also advised Investors to stick to quality businesses with supportive valuations in the medium to long-term investment horizon.

Meanwhile, Asian stocks were mixed in early deals on Monday.