Weekly Market Wrap to March 21, 2025: Sensex, Nifty gain over 4%; smallcap gauge climbs 9%

Indian equities in the week to March 21, 2025 posted healthy gains in line with the historical trend in March. In the last 5 sessions, Nifty has gained 953.2 points or 4.26 per cent to , while the 30-share BSE Sensex ended with hefty gains of 3,076.6 points or 4.17 per cent at 76,905.51.

Meanwhile, broader markets, smallcap and midcap indices logged substantial gains of 8.64 per cent and 7.74 per cent, respectively.

Sectorally, realty and media outperformed with gains of as much as 8 per cent, followed by pharma, metal and auto stocks. 

What led to stock market gains this week?

After the Federal Reserve despite the status quo on key policy rates signalled two possible rate cuts this year, the momentum on D-Street turned positive. Also, the latest FOMC commentary suggested that inflation is "transitory", meaning the Fed does not expect tariffs to significantly impact prices.

Ajit Mishra – SVP, Research, Religare Broking said, The dovish stance of the US Federal Reserve, which kept interest rates unchanged, provided relief to global markets."

The stability in global markets and moderation in FII selling have significantly improved sentiment. Notably, the recovery in banking and financial stocks, alongside strength in metal, real estate, and energy heavyweights, has played a crucial role in sustaining the momentum. Additionally, broader market participation and themes such as defense and railways have further eased pressure, he added.

Also, the sentiment led to gains in the IT pack as the US Fed also prioritised growth.

Alongside, as the markets are largely said to bottom out, this upward move was largely due. 

Furthermore, FIIs which were net sellers in Indian equities have turned net buyers during the week for two sessions. In the last session, FIIs bought into Indian equities worth Rs 3,239 crore.

Dr. Ravi Singh, SVP – Retail Research, Religare Broking said that the Fed decision has mixed implications for currency movements, capital flows and market sentiment in India. Higher U.S. interest rates could lead to foreign capital outflows from Indian markets, whereas lower rates may attract investment.

Additionally, economic uncertainty in the US could contribute to market volatility. However, a stronger dollar may impact global commodity prices. As India is a major oil importer, lower oil prices could benefit the Indian stock markets, added.

Nifty technicals

Rupak De, Senior Technical Analyst at LKP Securities said, "The Nifty continues to move upward following a falling trendline breakout, supported by upbeat sentiment. During the last trading session, the index encountered resistance at the 21-week exponential moving average, which is placed at 23,382. A decisive move above 23,400 could drive the index higher by another 200 points, as the next resistance is at 23,600. A clear breakout above 23,600 might trigger another leg of the rally. On the other hand, failure to move above 23,400 could lead to near-term consolidation."