Stock Market Outlook: Global Trends, Macro Data & Tariff Worries

Mumbai, Mar 9 (PTI) Global trends, macroeconomic announcements and US tariff developments are expected to drive stock markets in a holiday-shortened week, analysts said.

Market participants will also closely track foreign investor activity, geopolitical tensions, and their impact on the US dollar and crude oil prices, they added.

"The upcoming trading week will be a holiday-shortened one, with market participants closely monitoring global developments in the absence of major domestic events. Key factors to watch include fresh updates on tariff negotiations, geopolitical tensions, and their impact on the movement of the US dollar and crude oil prices.

"Foreign Institutional Investors (FIIs) have slowed their selling in cash markets, but any shift in their stance will remain a crucial indicator for market direction," Ajit Mishra, SVP of Research at Religare Broking Ltd, said.

On the macroeconomic front, the release of the Index of Industrial Production (IIP) and Consumer Price Index (CPI) inflation data will be closely monitored, Mishra said.

Equity markets will remain closed on Friday for Holi.

This week, the CPI data from the US and India are scheduled to be released on March 12.

Last week, the BSE Sensex climbed 1,134.48 points or 1.55 per cent, and the NSE Nifty rose 427.8 points or 1.93 per cent.

The global sentiment improved following reports of a delay in U.S. tariffs and the possibility of further negotiations, which helped stabilise financial markets. Additionally, a weaker dollar and a decline in crude oil prices further boosted investor confidence, he added.

Vinod Nair, Head of Research, Geojit Financial Services, said, the domestic market finally closed in the green after weeks of relentless selling, primarily due to a rebound in Q3FY25 GDP and a recovery in consumption. The metal, capital goods, and energy sectors outperformed on account of optimism over China's stimulus and lower crude oil prices.

"A fall in the dollar index also sweetened investor sentiment towards emerging markets, while the US equity markets have declined due to uncertainty over Trump's economic policies. On the tariffs front, the long-awaited tariffs were enacted but later backtracked by delaying their implementation, creating uncertainty among investors, Nair said.

"The domestic market gradually recovered from its oversold levels; however, a decisive upward momentum will be based on the recovery in corporate earnings and an ease in tariffs uncertainty. The premium valuation of broader indices may restrict a broad-based market recovery in the short run, while large caps appear attractive," he added.

According to analysts, the global sentiment improved following reports of a delay in U.S. tariffs and the possibility of further negotiations, which helped stabilise financial markets. The Reserve Bank of India's (RBI) decision to infuse additional liquidity into the system added to the positive momentum for the markets as well.

Nair further stated that investors will also keep a close eye on payroll data and US inflation to get cues for more signals on the Federal Reserve's next moves on interest rates.