The domestic stock market has shown tentative signs of recovery after a five-month downtrend, but analysts warn of continued volatility due to US tariff concerns. Although the temporary postponement of tariffs on Canada and Mexico provided a short-term boost, ongoing negotiations will remain a significant market driver. Foreign institutional investor (FII) selling remains a significant headwind, although the Nifty 50 has held above the 22,000 level, suggesting underlying resilience. Earnings stability is crucial for a sustained uptrend.
US President Donald Trump on 6 March 2025, announced a temporary exemption for goods imported from Canada and Mexico under the United States-Mexico-Canada Agreement (USMCA), delaying the implementation of a 25% tariff until April 2. In response to the U.S. tariff announcements, Canada has decided to postpone a planned second wave of retaliatory tariffs on $125 billion worth of U.S. products until April 2. Despite these temporary tariff exemptions, financial markets reacted negatively due to the prevailing uncertainty surrounding trade policies.
Domestic Cues:
The stock market will remain shut on Friday, 14 March 2025, on account of Holi.
India's industrial production for January will release on Wednesday, 12 March 2025. Industrial production in India grew by 3.2% year-on-year in December 2024, slowing from a downwardly revised 5% rise in November.
India's consumer inflation rate based on All India Consumer Price Index (CPI) for the month of February will release on Wednesday, 12 March 2025. The annual inflation rate in India fell to 4.31% in January of 2025 from 5.22% in the previous month.
India's balance of trade data for February will release on Friday, 14 March 2025. The merchandise trade deficit in India widened to $23 billion in January 2025 from $17.5 billion in the corresponding period of the previous year, slightly ahead of market expectations that it would rise to $22.35 billion. Imports rose by 9.2% annually to $59.4 billion, the highest in the month on record. In the meantime, exports edged down by 1.3% to $36.4 billion.
Global Cues:
US JOLTs job openings for January will release on Tuesday, 11 March 2025. Job openings in the United States fell by 556,000 to 7.6 million in December 2024, indicating a gradual cooling of the labor market.
US inflation data for February will release on Wednesday, 12 March 2025. The annual inflation rate in the US edged up to 3% in January 2025, compared to 2.9% in December 2024, indicating stalled progress in curbing inflation.
United States Producer Price Inflation (month-on-month) for February will release on Thursday, 13 March 2025. US factory gate prices rose 0.4% month-over-month in January 2025, below an upwardly revised 0.5% in December.
US Michigan Consumer Sentiment (preliminary) data for March will release on Friday, 14 March 2025. The University of Michigan consumer sentiment for the US was revised sharply lower to 64.7 in February 2025 from a preliminary of 67.8, reaching the lowest level since November 2023.