Week Ahead: Auto Sales, Macro Data, Trump Tariffs Among Key Triggers for Indian Stock Market
The Indian stock market finds itself on the precipice of a bearish phase after extending its losing streak for the third consecutive week. Domestic equity benchmarks have hit their lowest levels since June 2024, with sentiment deteriorating among both domestic and foreign investors. The primary concerns revolve around potential US trade tariffs and unfavorable global market conditions.
Markets Under Pressure: Current Scenario
Both Sensex and Nifty 50 concluded their week-long consolidation phase with a sharp 3% decline. The NSE benchmark has posted its longest monthly losing streak in the last 29 years—a trend not seen since 1996. The indices closed at their weekly lows of 22,124.70 and 73,198.10 respectively, extending losses for the eighth consecutive session.
Friday witnessed the most significant intraday drop of 2025, with the frontline indices shedding 6% in February alone. Both major indices are now down 15-16% from their September peaks, putting them dangerously close to bear market territory. The broader and more domestically focused mid-cap index has already confirmed a bear market, falling more than 20% from its September 24 record close.
Investors' wealth plunged by an astounding ₹9 lakh crore on Friday, bringing the total weekly wealth erosion to ₹20 lakh crore. All major sectors aligned with the broader market, posting losses, with IT, realty, and energy emerging as the top underperformers.
Key Market Triggers for the Coming Week
1. Auto Sales and Macro Data
As March begins, market participants will closely track high-frequency data. Monthly auto sales figures will provide insights into consumer spending patterns and economic health. Additionally, India's Composite PMI output for February will be released on Wednesday, March 5, with forecasts pointing to a figure of 60.6.
This composite output, which represents a weighted average of manufacturing output and services business activity indices, will be crucial in determining market sentiment. A reading better than expected would signal positive economic momentum, while a lower-than-anticipated figure could further pressure the markets.
2. Foreign Institutional Activity
Institutional activity continues to be a major concern, with net foreign institutional investors (FII) outflows of ₹22,011 crore in the cash segment during the previous week. While domestic institutional investors (DII) provided some support with inflows of ₹22,252 crore, foreign portfolio investors (FPIs) pulled out equities worth ₹34,574 crore in February alone.
An interesting paradox in FII selling is their heavy divestment from financial services—a sector that continues to perform well and offers attractive valuations. The net sales figure for 2025 up to February stands at a concerning ₹1,12,601 crore.
3. Trump's Tariff Policies
Investors will be watching developments around Donald Trump's tariff announcements closely. Concerns over the impact of US tariffs on global trade have been a significant factor behind the recent market weakness. Any concrete announcements or policy clarifications in this regard could trigger substantial market movements.
4. Global Cues
The upcoming week will be dynamic for global markets, driven by key macroeconomic data releases from major economies:
- US S&P Global Manufacturing PMI (February) - Expected at 51.6
- UK S&P Global Manufacturing PMI (February) - Forecasted at 46.4
- China S&P Global Manufacturing PMI (February) - Projected at 50.6
- US initial jobless claims data on March 6 (projected at 250K)
- US unemployment rate for February on March 7
Federal Reserve Chairman Jerome Powell's speech on Friday will be particularly significant, as it may provide insights into the central bank's economic outlook and potential policy directions.
5. Corporate Actions
Several companies, including Metro Brands and SBI Life Insurance, will trade ex-dividend in the coming week. Additionally, some stocks will trade ex-split and ex-bonus, which could influence individual stock movements and overall market sentiment.
Technical Outlook
From a technical perspective, Nifty is approaching a crucial support zone of 21,800-22,000. Market analysts suggest that a decisive break below this range could extend the decline toward the 21,000-21,200 zone, potentially pushing the index officially into bear market territory.
The quarterly GDP data for Q3 FY25 met expectations at 6.5%, with the agriculture sector posting steady growth. This indicates a likely improvement in the kharif crop, which could potentially support rural consumption. However, in the near term, market conditions are expected to remain weak.
A gradual recovery is anticipated only when earnings improve from Q1 FY26 and global trade policy uncertainties subside. Investors should prepare for continued volatility as both global and domestic challenges persist.
Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.
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