US Tariff-Related Developments, Global Trends, FIIs Trading Key Drivers For Markets This Week: Analysts

Equity markets will take cues from the US tariff-related developments, global trends and trading activity of foreign investors this week, analysts said.

Markets may face volatile trends going ahead as investor sentiment continues to remain weak due to escalating trade tariff concerns and foreign fund outflows, experts noted.

In February alone, the NSE Nifty tanked 1,383.7 points or 5.88%. The BSE Sensex lost 4,302.47 points or 5.55% last month.

From its record peak of 85,978.25 hit on Sept. 27 last year, the BSE benchmark index is down 12,780.15 points or 14.86%. The Nifty dropped 4,152.65 points or 15.80% from its lifetime high of 26,277.35 hit on Sept. 27, 2024.

"Investors will be closely watching key events, including the tariff policy, and jobless claims. In the near term, market conditions are expected to remain weak, with a gradual recovery anticipated as earnings improve from Q1 FY26 and global trade policy uncertainties subside," Vinod Nair, head of research of Geojit Financial Services, said.

From macroeconomic space, announcement of HSBC manufacturing and services PMI data during the week would also be tracked by investors.

"We expect the market to continue to trade with weakness due to weak global sentiments and lack of domestic triggers," Siddhartha Khemka, head- research, wealth management at Motilal Oswal Financial Services Ltd, said.

The Indian economy grew 6.2% in the December quarter, recovering sequentially from seven-quarter lows, but the expansion came in lower than last year and at a time when it faces growing headwinds from the threat of a US tariff war.

The 6.2% growth in gross domestic product was higher than a revised reading of 5.6% expansion in the July-September 2024 period, according to data released by the Statistics Ministry on Friday. It was, however, lower than the RBI's estimate of 6.8% for the period.

Last week, the BSE benchmark slumped 2,112.96 points or 2.8%, and the Nifty tanked 671.2 points or 2.94%.

"Uncertainty often weighs more than the actual event, and the market is currently grappling with concerns over potential trade wars. Additionally, persistent FII (Foreign Institutional Investors) selling continues to add pressure," Ajit Mishra, SVP, research at Religare Broking Ltd, said.

Gross GST collections rose by 9.1% to about Rs 1.84 lakh crore in February, boosted by domestic consumption and indicating potential economic revival.

As per the official data released on Saturday, on a gross basis, mop up from Central GST stood at Rs 35,204 crore, State GST at Rs 43,704 crore, Integrated GST at Rs 90,870 crore and compensation cess of Rs 13,868 crore.

"We are close to the signs of market capitulation with Friday's losses and might see a relief rally this week from oversold conditions but the overall market is expected to be volatile with downward bias in the near term," Satish Chandra Aluri, analyst at Lemonn Markets Desk, said.