FY26: A Year to Accumulate, Not Just Speculate 🪜
- Prasanna Bidkar
- Mar 29
- 4 min read
The last trading week of FY25 saw the markets cooling off after the previous week's rally. While the Nifty edged up 0.7% and the Bank Nifty outperformed with a 1.9% gain, midcaps faced some pressure, with the Nifty Midcap 100 ending slightly lower.
Looking back, FY25 had a strong start, but things took a turn after a September peak. Rising US Treasury yields, FII withdrawals, short selling, weak corporate earnings, and global uncertainties dragged markets lower in the following months.
However, March turned the tide, with the Nifty surging 6.3%, driven by short-covering, renewed FII buying, a softer US trade stance, and year-end positioning—wrapping up FY25 on a high note.
Market Performance
Here's how the major indices fared:
Index | March 21, 2025 | March 28, 2025 | % Change |
Nifty | 23,350.4 | 23,519.4 | 0.72% |
Bank Nifty | 50,593.5 | 51,564.8 | 1.92% |
Midcap Nifty | 51,850.8 | 51,672.3 | -0.34% |
Sector Performance
Defence (+2.3%), Capital Markets (+2%), and PSU Banks (+2%) led the gains, while Media (-4.9%) saw sharp profit booking.
Auto stocks took a hit as the US imposed a 25% tariff on imports, impacting Tata Motors (33% of JLR’s volumes from NA) and Sona BLW (43% NA revenue), though SAMIL remained relatively insulated due to its global footprint.
Pharma and Realty also faced pressure. Pharma weakness was expected due to US market exposure.
Indices | Weekly Change (%) |
Nifty PSU Bank | 2.16 |
Nifty Financial Services | 2.06 |
Nifty Bank | 1.92 |
Nifty FMCG | 1.14 |
Nifty IT | 0.50 |
Nifty Select Midcap | 0.34 |
Nifty Energy | 0.29 |
Nifty Metal | -1.21 |
Nifty Realty | -1.33 |
Nifty Auto | -2.12 |
Nifty Pharma | -2.26 |
Nifty Media | -4.68 |
Weekly Top Gainers (Nifty 500)
Company | Weekly Gain (%) |
BEML | 15.2 |
BSE | 14.7 |
Reliance Power | 13.6 |
PTC Industries | 13.1 |
HEG | 12.4 |
Weekly Top Losers (Nifty 500)
Company | Weekly Loss (%) |
Zomato | -11.4 |
Alok Industries | -11.1 |
Vodafone Idea | -10.8 |
Indian Overseas Bank | -10.5 |
Uno Minda | -10.1 |
BEML surged 15% as fresh defence reforms and a Rs. 54,000 crore acquisition push from the defence acquisition council signalled a pickup in orders. BSE gained 15% on SEBI’s proposal to standardise derivative expiries, while HEG rose 12% after Japan’s anti-dumping duty on Chinese graphite electrodes.
Zomato dropped 11% as Jefferies cut Blinkit’s profitability estimates, citing rising competition. Indian Overseas Bank fell 10% after its Rs. 1,400 crore QIP. Alok Industries, Vodafone Idea, and Uno Minda also saw notable declines.
Liquidity Conditions
Foreign investors are making a swift return, buying on four of the last five days and pumping over Rs. 17,000 crore into Indian equities.
Unlike most emerging markets, India, along with Brazil, the Philippines, and South Korea, saw positive FPI flows in March.
The FII buying could persist, supported by India’s stronger economic growth, improved valuations post-correction, and a relatively stable currency.
However, volatility can not be ruled out due to uncertainty regarding US tariffs.
India Equity - Institutional Funds Flow (in Rs. crore)
Date | FII | DII |
March 24, 2025 | 3,056 | 99 |
March 25, 2025 | 5,372 | -2,769 |
March 26, 2025 | 2,241 | -696 |
March 27, 2025 | 11,111 | 2,518 |
March 28, 2025 | -4,352 | 7,647 |
Total | 17,428 | 6,799 |
From Euphoria to Caution: FY25 in Hindsight
Equity markets began FY25 on a high, with a strong bull rally pushing benchmarks to record highs in September 2024.
However, the second half told a different story, marked by a sharp correction driven by foreign investor outflows, weaker-than-expected corporate earnings, and, more recently, concerns around US President Donald Trump’s tariff policies.
As a result, FY25 ended with muted gains. The Sensex and Nifty50 closed the fiscal year with gains of nearly 5% each, while the broader Nifty Midcap100 and Nifty Smallcap100 indices rose by 5.4% and 7.5%, respectively.
March, however, saw some respite, with foreign investors making a comeback and valuations turning more attractive post-correction.
While near-term volatility remains a factor, FY26 could shape up as a year of consolidation—one where investors focus on accumulating quality names rather than chasing momentum.
Technical Perspective
Technically, after a strong uptrend, the market hit resistance at 23,850 (Nifty) /78,740 (Sensex) and reversed, forming a Doji on the weekly chart—signaling indecision. Selling pressure persists at higher levels, but the short-term sentiment remains positive.
Key levels to watch:
Support: Below 23,650/78,200, the market could retest 23,280/77,100, with further downside to 23,100/76,600
Resistance: A rise above 23,650/78,200 may lead to 23,850/78,800. A breakout could push towards 24,000/79,300
For Bank Nifty, the 200-day SMA at 51,000 is a crucial support. Holding above this level could drive an upside to 52,200-52,500, while a break below 51,000 may lead to 50,500-50,400.
FY26: A Year to Accumulate, Not Just Speculate
FY25 was a two part rollercoaster ride—bullish in the first, volatile in the second. While long-term optimism for India remains intact, FY26 will be shaped by rate cuts, inflation trends, and GDP data on the macro front.
On the micro level, corporate earnings and tariff impacts will dictate market movements. The next two quarters will be crucial in determining whether a revival is underway.
In this environment, a stock-specific approach is more critical than ever. The days of broad buy-and-hold strategies may not work as they did until 1HFY25.
Instead, investors will need to be selective, identifying businesses that can weather uncertainty and emerge stronger.
But one thing is clear: opportunities will arise in FY26 for those who can separate the wheat from the chaff. A market in flux creates openings for sharp investors to position themselves ahead of the curve.
cautious
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