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Volatility on cards as tariff now viewed as a hinderance to growth

ICICIdirect Research 07 Mar 2025 DISCLAIMER

Nifty snapped three weeks losing streak and settled at 22600, up 2% amidst tariff related volatility. Nifty rebounded from the psychological support level of 22,000, driven by heavyweight stocks such as Reliance, Tata Steel, Hindalco, BPCL, among others. The ongoing recovery has been accompanied by a decline in FII selling pressure in the cash market, although their derivative positions remain net short.

Sectorally, Metal remained outlier tracking falling US dollar index while sharp pullback witnessed in beaten down PSU, Power stocks

What to expect: In the upcoming truncated week, we expect continuation of technical pullback towards 23000 mark amid extreme oversold reading on monthly chart.

In the process, volatility would prevail tracking tariff related development. Uncertainty regarding global growth and inflation remains, as top two global economies continue to be engaged in tariff war

Domestic macros are getting better with ~ 14% CAGR growth estimated in FY26-27 for Nifty, relative advantage of tariff arbitrage, crude being down among other factors

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