Nifty50 Tests Resistance Levels

Markets Rebound as Smallcaps Lead the Rally

Indian stock markets rebounded strongly in the week ending March 7, 2025, with broader indices outperforming benchmark indices. More than 200 smallcap stocks delivered double-digit gains, defying global market volatility and concerns over U.S. tariff policy changes.

The recovery comes after weeks of market turbulence, with investors finding confidence in stronger domestic economic data, easing crude oil prices, and improved consumption trends.

Market Highlights

• Sensex surged 1,134.48 points (+1.54%) to close at 74,332.58.
• Nifty50 climbed 427.8 points (+1.93%) to settle at 22,552.50.
• BSE Large-cap Index gained 2.4%.
• BSE Mid-cap Index advanced 3.3%.
• BSE Small-cap Index jumped 6%, significantly outperforming major indices.

The strong rally in smallcap stocks was driven by improved investor sentiment, with many stocks posting 20-40% weekly gains despite volatility in the global markets.

Sectoral Performance: Metals, Media, and Energy Stocks Lead the Gains

All sectoral indices closed in the green, signaling broad-based participation in the rally.

• Nifty Metal Index surged 8.6%, leading sectoral gains.
• Nifty Media Index advanced 7.3%, fueled by renewed investor confidence.
• Nifty Energy Index gained 6% as crude oil prices declined.
• Nifty Oil & Gas Index climbed 5.3% on positive global energy trends.
• Nifty PSU Bank Index rose 5%, driven by improved earnings outlook.

Expert Insights: What’s Driving the Market Recovery?

Vinod Nair, Head of Research, Geojit Financial Services

• The rally was fueled by stronger-than-expected Q3FY25 GDP growth and a recovery in consumer spending.
• Metal, capital goods, and energy stocks gained on optimism over China’s economic stimulus measures and a drop in global crude oil prices.
• A weaker U.S. dollar improved investor sentiment in emerging markets like India, boosting equity flows.
• Market uncertainty persists due to U.S. tariff policy fluctuations, affecting investor confidence.

“The domestic market rebounded after weeks of relentless selling. However, a decisive uptrend will depend on corporate earnings recovery and clarity on global trade policies,” said Nair.

Top Smallcap Gainers & Laggards

Smallcap Stocks with 20-40% Gains

Several smallcap stocks saw exceptional weekly gains, reflecting renewed investor confidence in the broader market:

• Coffee Day Enterprises
• Triveni Turbine
• Vadilal Industries
• Man Industries (India)
• Sandur Manganese
• Anupam Rasayan India
• Bharat Wire Ropes
• MPS Ltd
• Alivus Life Sciences
• Windlas Biotech
• Himatsingka Seide
• PTC Industries
• Sun Pharma Advanced Research Company
• Jyoti CNC Automation
• NACL Industries
• Zen Technologies

Top Smallcap Losers (22-40% Drop)

Despite the broader market rally, some stocks faced heavy declines:

• Gensol Engineering
• EKI Energy Services
• Jindal Worldwide
• Suratwwala Business Group

Technical Outlook: Where is Nifty50 Headed Next?

Rupak De, Senior Technical Analyst, LKP Securities

• Nifty remained volatile within a narrow range, closing with a small-bodied candle on the daily chart.
• Key Resistance Levels: 22,700–22,750
• Key Support Levels: 22,400 (a break below could lead to a loss of momentum).

Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities

• The market is showing signs of consolidation after closing above the February 28 downside gap at 22,500.
• A sharp move beyond 22,750–22,800 could bring bulls back into action.
• Crucial Support Zone: 22,250, where buying interest may emerge.

Devarsh Vakil, Head of Prime Research, HDFC Securities

• Nifty has recovered over 650 points from its recent swing low of 21,964.
• The short-term trend remains bullish, with momentum building in favor of the bulls.
• Key Resistance: 22,700–22,725 (aligned with the 21-day Exponential Moving Average).
• Strong Support Zone: 22,300, which has held firm in recent sessions.

Market Outlook: Can Bulls Sustain the Rally?

While the broader indices posted strong weekly gains, analysts remain cautious about the short-term trajectory of the market.

Market Factors to Watch:

1. Corporate Earnings Growth: Sustained earnings momentum will be critical for continued market strength.
2. Global Economic Conditions: U.S. inflation data and interest rate decisions could impact investor sentiment.
3. Tariff Policy Uncertainty: Fluctuations in U.S. trade policies could create volatility in global markets.
4. Foreign Institutional Investor (FII) Activity: A pickup in FII inflows could further boost market sentiment.
5. Sector Rotation: Large-cap stocks may gain traction as valuations in mid and smallcap stocks remain elevated.

Bulls Await a Breakout Above 22,750

Nifty50’s short-term trend remains positive, but a break above 22,750 is crucial for further gains. Investors are likely to remain cautious, awaiting more clarity on U.S. tariff policies and corporate earnings.

A decisive move above 22,800 could trigger fresh buying momentum, while strong support remains at 22,300–22,400.

As global uncertainties persist, investors should remain selective and focus on quality stocks with strong fundamentals.