Tariff moves, FII trading activity likely to drive markets this week

The implication of April 2 reciprocal tariffs on global trade, trends in overseas markets and trading activity of foreign investors would dictate equity investors' sentiment in a holiday-shortened week ahead, according to analysts.

Stock markets would remain closed on Monday for Eid-Ul-Fitr.

The US has threatened to impose reciprocal tariffs on its key trading partners, including India, on April 2.

"All eyes are now on Trump's April 2 tariff announcement," Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said. 

Among macroeconomic data announcements this week, PMI (Purchasing Managers' Index) data for manufacturing and services sectors would also be tracked by investors.

"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," Ajit Mishra, SVP, Research, Religare Broking Ltd, said.

"Going forward, the trend in FII flows will depend mainly on Trump's reciprocal tariffs expected on April 2nd. If the tariffs are not severe, the rally may continue," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

The change in FII (Foreign Institutional Investors) strategy from sustained selling to modest buying which was visible in the week ending March 21 continued with increased intensity for the week ending March 28, he added.

Investors would also be tracking the rupee-dollar trend and movement of global oil benchmark Brent crude.

"This week is expected to offer greater clarity on tariff developments, enabling investors to assess their impact on the global economy. Key economic indicators to watch include US job opening data and India's PMI, both of which will provide insights into economic momentum in their respective regions.

"Meanwhile, investor focus is shifting toward quarterly earnings reports, which are anticipated to provide a clearer picture of earnings recovery," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

Last week, the BSE benchmark gauge climbed 509.41 points, or 0.66 per cent, and the NSE Nifty went up 168.95 points, or 0.72 per cent.

In the 2024-25 fiscal year, the BSE bellwether gauge jumped 3,763.57 points, or 5.10 per cent, and the Nifty climbed 1,192.45 points, or 5.34 per cent.

The market capitalisation of BSE-listed firms surged Rs 25,90,546.73 crore to Rs 4,12,87,646.50 crore (USD 4.82 trillion) in FY25.