Nifty 50 logs best jump in 15 months after historic five-month losing streak: What should be your trading strategy now?

Stock market today: The Nifty 50 index logged its best jump in 15 months, which helped the domestic benchmark pull back from losses after a historic five-month losing streak and finish the financial year 2024-25 (FY25) with gains. The index of 50 bluechip stocks rose 6.3 per cent in March 2025, contributing to 5.34 per cent gains for FY25, while the BSE Sensex advanced 5.1 per cent. The benchmarks were in the red as recently as March 4.

The rally was driven by investors scooping up beaten-down stocks, the return of foreign inflows after a selling spree that began in late September, and improving economic indicators. After rising about 16 per cent in the first half of the fiscal year, the Nifty 50 erased those gains in the next five months.

Also Read: Indian stock market: Nifty 50 posts a modest gain of 5% in FY25; will FY26 be a year of healthy gains? Experts weigh in

Sensex, Nifty in FY25 vs FY24

Although the Nifty is still down 10.5 per cent from its record highs in late September, market participants believe the worst is over for Indian equities. Sensex hit its all-time high of 85,978.25 on September 27. The indices witnessed pressure from October amid worries over foreign investors fleeing the domestic market and stretched valuations of the equities.

In October 2024 alone, the BSE benchmark slumped 4,910.72 points or 5.82 per cent. After a stellar show in the 2023-24 (FY24) fiscal year, stock markets had a roller coaster ride in FY25. In FY25, the BSE bellwether gauge jumped 3,763.57 points or 5.10 per cent, and the NSE Nifty climbed 1,192.45 points or 5.34 per cent.

The market capitalisation of BSE-listed firms surged by ₹25,90,546.73 crore to ₹4,12,87,646.50 crore ($ 4.82 trillion) in FY25. Investors became richer by ₹25.90 lakh crore in FY25. In FY24, the Sensex climbed 14,659.83 points, or 24.85 per cent.

"It is a tale of two halves for Indian equities in FY25. Markets entered FY25 during the start of general elections in a range-bound fashion and have been volatile till the results in June with flat performance but went on to hit multiple record highs in June-Sep after the coalition government headed by PM Modi signalled policy continuity despite BJP not getting majority on its own," said Satish Chandra Aluri, Analyst, Lemonn Markets Desk.

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However, the tone dramatically shifted from October as Q2 earnings disappointed, bringing elevated valuations back into focus as foreigners started to exit India, he noted. "Coupled with global developments such as China's massive stimulus and the return of Trump after the US election, foreign outflows accelerated," said Aluri.

"After rallying ~17 per cent in the first half of fiscal year, markets recorded five consecutive monthly declines from Oct-Feb 2025 – a record not seen in the last 29 years – on disappointing earnings, sharp devaluation and foreign exodus," Aluri noted.

He added that markets staged a rebound in March to close out the fiscal year with gains despite weak global cues due to Trump's tariff threats and concerns over a slowdown in the US. According to Aluri, FY25 also reported widespread euphoria in the IPO markets.

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Aluri believes markets are entering FY26 with better fundamentals and an improving domestic outlook. Valuations for large caps are now close to historic levels, and the central bank is expected to deliver further rate cuts in the coming months. However, global uncertainty rose with trade wars and shifting geopolitical headwinds from the Middle East to Europe.

Stock market today: What should be your trading strategy in FY26?

According to Vaibhav Porwal, Co-Founder of Dezerv, “Despite the correction, India’s long-term growth story looks promising. Key positives include upcoming monetary easing, fiscal deficit reduction to 4.4 per cent by FY26, tax relief boosting consumption, and healthier banking sector balance sheets.”

“So instead of panicking and taking action on portfolios, investors should focus on fundamentals, review all external assets, and assess their asset allocation. FY26 will be a year of asset allocation where, instead of a broad market rally, there will be pockets of opportunities for wealth creation. Investors should focus on picking assets that reflect their risk appetites.”

While equity market returns have been between 20-25 per cent in the past year across certain categories, investors are advised to rationalise expectations to about 13-15 per cent. Amidst market volatility, investors should stay disciplined and continue with their SIPs. Market corrections let one enter at a lower cost, thus reducing the average cost of investing.

"If we look at historical market corrections of ~15-20 per cent, the markets have delivered a median return of ~ 15 per cent over the next three years. This presents a good opportunity for investors to generate returns in actively managed portfolios," added Porwal of Dezerv.

According to Krishna Appala, Sr. Research Analyst at Capitalmind Research, mid-cap and small-cap valuations stay elevated compared to historical norms, prompting investors to focus on fundamentals and earnings visibility rather than momentum-driven themes. Sector performance is mixed.

Banking shines with reasonable valuations, while once-buoyant sectors face corrections, suggesting a reversion to mean. "Near-term volatility from global factors is expected, but India’s strong domestic market supports a positive long-term outlook. In this context, assets like gold could act as a portfolio stabilizer, complementing broader investment strategies rather than serving as a tactical play," said Appala.

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Technical View: Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said, “After showing a decent upside recovery from the lows on Thursday, Nifty slipped into weakness amidst range movement on Friday and closed the day lower by 72 points. An attempt to stage an upside recovery met with selling pressure, and Nifty finally closed near the lows.”

A reasonable negative candle was formed on the daily chart, indicating that bulls cannot continue with a follow-through or up-move. The present chart pattern signals chances of range-bound action developing within a high low of around 23,650-23,400 levels.

"On the weekly chart, Nifty formed a small candle with a long upper shadow. Technically, this market action indicates the formation of a type of candle pattern (type of gravestone doji -not a classical one). This market action suggests more consolidation for the short term," said Shetti.

“The near-term uptrend of Nifty remains intact and the downward correction from the highs has not damaged the underlying uptrend so far. Immediate support is placed at 23,400 (200-day EMA), and the overhead resistance is to be watched around 23,650 levels and the next 23850 for the coming week.”

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.