Sensex Rally Faces Test from Q4 Results & Global Tariffs

Week Ahead: Indian Markets Watch Q4 Earnings, Trump Tariffs, and F&O Expiry for Direction

After a blockbuster rally that helped erase year-to-date losses, the Indian stock market heads into a critical week filled with high-stakes triggers. From Q4 results to Donald Trump’s tariff rhetoric, and the F&O expiry, the stage is set for a volatile ride in the final stretch of April.

Investors will have their eyes peeled for key data and global developments that could shape sentiment in both equity and derivatives markets.

Sensex and Nifty Post Best Week in Four Years

The BSE Sensex and NSE Nifty 50 surged impressively during the holiday-shortened week, powered by a sharp reversal in foreign institutional investor (FII) flows, optimism around global trade diplomacy, and bullish cues from the Reserve Bank of India (RBI).

• Sensex soared by 1,508.91 points (1.96%) on Friday, closing at 78,553.20, reclaiming the 78,000 mark.
• Nifty 50 jumped 414.45 points (1.77%) to end at 23,851.65.
• In just four trading sessions, Sensex rallied 4,706 points (6.37%) while Nifty gained 1,452.5 points (6.48%). 

Despite this rally, both benchmarks remain about 9% below their all-time highs hit in late September 2024.

What’s Fueling the Momentum?

According to Vishnu Kant Upadhyay, AVP – Research & Advisory at Master Capital Services, the market's resurgence has been supported by:

• A valuation reset after earlier corrections.
• Relief rally following Trump’s pause on fresh tariffs.
• Positive RBI policy cues, with the central bank maintaining accommodative stance and signaling stability. 

These factors have injected fresh confidence into domestic equities, particularly among banking and financial stocks.

Key Triggers to Watch This Week

 1. March Quarter Results (Q4 FY25)

Corporate earnings will remain at the center of attention. Investors will scrutinize:

• Net interest margins of top banks.
• Revenue growth in consumer and auto sectors.
• Commentary from IT and pharma firms on global exposure and margin outlooks. 

Companies like Infosys, HDFC Bank, Reliance, and Tata Motors are likely to be closely watched.

 Explore Q4 results calendar here

 2. Donald Trump’s Tariff Gambit

The former U.S. president’s reciprocal tariff threat on Asian and European allies, including India, has spooked investors. Although a pause in fresh U.S. tariff announcements sparked last week's rally, the situation remains fluid.

Any aggressive policy announcement can:

• Weigh on export-heavy sectors like IT, auto, and textiles.
• Impact Rupee-dollar movement.
• Drive safe-haven inflows into gold or bonds.

 3. F&O Expiry: April Series

The expiry of April derivatives contracts on Thursday is expected to bring heightened volatility. Traders will keep an eye on:

• Open interest build-up in Nifty and Bank Nifty.
• Put-call ratios and rollover trends.
• Institutional positioning, especially in index futures. 

Derivatives expiry weeks often witness whipsaw moves, and this week may be no exception given the cluster of global and domestic triggers.

  4. Global Market Cues

India is not an island. Investors will stay tuned to:

• China’s Loan Prime Rate decision.
• Economic data from Europe and US, including jobless claims, GDP growth, and inflation prints.
• U.S. earnings reports from tech giants: Google, Microsoft, and Tesla. 

A stronger-than-expected U.S. GDP could revive rate hike fears and affect foreign fund flows into Indian equities.

Sector Spotlight: Banks, Autos, and FMCG

 Banking and financials: Enjoyed a stellar rally last week. With RBI’s dovish tone and lower deposit rates, banks are expected to post healthy margins.

 Automobile stocks: May stay in focus with companies like Bajaj Auto, Tata Motors, and Maruti set to report numbers. Global trade pressures and export data will be key.

 FMCG firms: Could post mixed results due to tepid rural demand. However, cooling input costs may aid margins.

Market Sentiment: Will the Bulls Hold Ground?

India’s market mood has swung from pessimism to cautious optimism. While foreign inflows have returned, and retail participation remains strong, much depends on the quality of Q4 earnings and global stability.

A strong result season coupled with clarity on global tariffs and soft inflation could even set the stage for a pre-election rally, according to analysts at Motilal Oswal.

Final Thoughts

This week could make or break the ongoing rally. Q4 results, Trump’s trade tantrums, global cues, and expiry dynamics will shape the narrative. Whether the Sensex and Nifty can maintain their upward momentum or give in to volatility will depend on how these factors unfold.

Stay tuned, stay nimble  it’s going to be a decisive week for D-Street!

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