Indian Stock Market Surges Amid Positive Economic Signals
In a dramatic twist, the Indian stock market staged a remarkable comeback last week, absorbing the relentless pressures of previous weeks marked by sharp declines. The revered Sensex soared by an impressive 1,300 points, or 1.88%, finally closing at 74,332. Meanwhile, Nifty rallied to 22,552, reflecting a robust rise of 379 points or 1.71%.
Vinod Nair, Head of Research at Geojit Financial Services, dissected the causes of this rebound, highlighting a revival in the Q3FY25 GDP and a resurgence in consumer spending as pivotal influences. “The decline in the dollar index bolstered investor optimism towards emerging markets,” he noted, implicating a larger picture where the US equity markets faltered under the weight of uncertainty around Trump’s economic maneuvers.
However, the persistent trend of Foreign Institutional Investors (FIIs) leaning towards selling persisted into early March, with net equity sold amounting to an alarming ₹24,753 crores in just the first week of the month.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit, offered insight into the shifting tides, conveying, “There’s notable buying momentum in Chinese stocks, driven largely by enticing valuations and the recent proactive measures from the Chinese government to invigorate its major enterprises.”
As we brace for the week ahead, critical economic indicators are set to unravel: the much-anticipated Consumer Price Index (CPI) data for February, US inflation statistics, dividend announcements from Bharat Electronics Limited (BEL) and Housing & Urban Development Corporation (HUDCO), along with the ongoing trends in FII activities and tariffs instigated by Trump.
Inflation Data on the Horizon
This week, the Indian government will unveil the CPI figures for February 2025. The previous month’s headline inflation cooled off to a notable 4.31%, marking the most inviting year-on-year figure since August 2024.
FII Trends: A Narrative of Caution
As we venture into March, FIIs have affirmed their status as net-sellers. Analysts are keeping a vigilant eye on the massive outflows directing towards Chinese stocks, as this shift has propelled the Hang Seng Index to a year-to-date return of 23.48%—a stark contrast to Nifty’s dismal -5%.
The Nerves of US Inflation Data
On the other side of the globe, the US is gearing up to release crucial inflation data, especially following disappointing employment figures. Economists surveyed by Bloomberg project a modest uptick in the CPI less food and energy categories, expected to rise by 0.3%.
Trade War Tensions: Trump’s Tariff Provocations
In a potentially inflammatory announcement, US President Donald Trump has signaled intentions to impose 20% tariffs on imports from both Mexico and Canada, coupled with retaliatory tariffs against China. This announcement has set off tremors in global markets, heightening fears of an approaching trade war.
Upcoming Dividends for BEL and HUDCO
In company news, Bharat Electronics Limited (BEL) has declared an eye-catching interim dividend of ₹1.50 per share for the financial year 2024-25, to be disbursed within 30 days of the declaration. The key record date for this payout is set as March 11, 2025.
Meanwhile, HUDCO is on the brink of approving its second interim dividend for the same financial year, with a board meeting scheduled for March 10, 2025, to finalize this financially pivotal decision. Shareholders should mark March 14, 2025, on their calendars, as it is the designated record date for eligibility.
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