The Indian stock market opened the new financial year on a cautious note, with the Nifty index showing signs of consolidation after a turbulent end to FY2025. On April 1, 2025, the market resumed trading following a three-day break, with the Nifty index closing at 23,519.35, down 72.60 points or 0.31% from the previous session. The BSE Sensex also fell by 191.51 points, or 0.25%, to settle at 77,414.92. The previous fiscal year had seen a notable recovery, with the Sensex and Nifty gaining 3,763.57 points, or 5.10%, and 1,192.45 points, or 5.34%, respectively.
Market analysts have pointed out that the Nifty's recent price action indicates a potential consolidation phase, particularly around the crucial 200-day Exponential Moving Average (EMA), which has become a significant support level. Dhupesh Dhameja, a derivatives analyst at SAMCO Securities, noted, "Nifty index has closed near 200-day EMA support. A sustained buying interest is seen around this." He further explained that the range of 23,500 to 23,300 has transformed into an accumulation zone, supported by aggressive put writing.
Despite the recent downturn, the Nifty's Relative Strength Index (RSI) remains steady above 60, suggesting that dips are being absorbed and hinting at ongoing accumulation. "Nifty RSI remains firm above 60 on the daily chart, while Nifty continues to trade comfortably above its key moving averages, suggesting that dips are being absorbed," Dhameja added. The demand zone has solidified between 23,400 and 23,350, aligning with the 200-day EMA, providing a critical support base.
Om Mehra, a technical analyst at SAMCO Securities, observed that the Nifty daily chart is forming a higher high and higher low pattern, which reinforces its bullish momentum. He stated, "Nifty is comfortably positioned above the 20, 50, and 100 EMAs, while the daily RSI remains steady above the 60 mark, indicating sustained strength." Support levels include the 23.6% Fibonacci retracement at 23,500, while a more substantial cushion is found at the 38.2% retracement level at 23,280. Mehra anticipates that the Nifty may consolidate for some time before making its next decisive move.
Nagaraj Shetti, a senior technical research analyst at HDFC Securities, echoed similar sentiments, stating that the Nifty weekly chart shows a formation of a small candle with a long upper shadow. This pattern suggests further consolidation in the short term, although the near-term uptrend remains intact. "The downward correction from the highs has not damaged the underlying uptrend so far. Nifty's immediate support is placed at 23,400 (200-day EMA) and the overhead resistance to be watched around 23,650 levels and next 23,850 for the coming week," Shetti noted.
March 2025 marked a significant rebound for the Indian stock market, concluding the fiscal year on a positive note after five consecutive months of declines from October to February. Foreign investors returned to the market, contributing to the overall recovery. The Bank Nifty outperformed, rising over 2% to close at 51,564.81, while the India VIX, a key indicator of market volatility, fell by 4.38% to 12.71, indicating reduced uncertainty.
Looking ahead, the market is poised to react to upcoming macroeconomic data and geopolitical developments. The anticipated U.S. tariffs, set to be announced by President Donald Trump on April 2, are expected to impact market sentiment significantly. Analysts are closely monitoring the outcomes of the ongoing U.S.-India trade talks and the implications for the new global macro regime for FY2026.
In the context of stock recommendations for April 1, Sumeet Bagadia, executive director at Choice Broking, advised investors to consider purchasing two stocks: Sumitomo Chemical India and Transformers and Rectifiers (India). For Sumitomo Chemical, he suggested buying at ₹559.35 with a target of ₹599 and a stop-loss at ₹540. The stock has shown strong upward momentum, recently breaking out of a short-term consolidation phase.
Similarly, for Transformers and Rectifiers, Bagadia recommended buying at ₹536.2, targeting ₹570 with a stop-loss at ₹515. The bullish trend for TARIL continues, as it has maintained its upward trajectory after a breakout from previous resistance levels.
As the market navigates through this uncertain period, analysts suggest that investors should remain vigilant and adopt a disciplined approach to risk management. The upcoming economic data releases, including the HSBC India Composite PMI on April 4, are expected to provide further insights into the health of the manufacturing and services sectors, which could influence market direction.
In summary, the Indian stock market is entering FY2026 with a mixed outlook, characterized by cautious optimism and potential volatility. Investors are advised to keep an eye on key support and resistance levels, macroeconomic indicators, and ongoing geopolitical developments that could shape market sentiment in the weeks to come.
