Stock markets are anticipated to be influenced by the Reserve Bank of India’s (RBI) interest rate decision, tariff developments, global trends, and the trading activities of foreign investors during this holiday-shortened week, analysts noted.
Investors will also monitor macroeconomic data releases, including industrial production and the HSBC Purchasing Managers’ Index (PMI) for manufacturing. The stock markets will remain closed on Thursday in observance of Dussehra and Mahatma Gandhi Jayanti.
“Markets are entering a data-intensive week, where both domestic and global indicators will drive momentum. Key focuses include the industrial production data, the RBI’s policy decision, and the expiry of September derivatives contracts, which may induce additional volatility,” stated Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd.
Recent developments reveal that India and the United States have opted to continue negotiations for a timely and mutually beneficial bilateral trade agreement, as reported by the Commerce Ministry on Friday.
“At this juncture, there is significant attention on US-India trade relations, with potential for a relief rally. Domestically, the upcoming RBI policy announcement on October 1 is critical, and there is market uncertainty regarding the potential for a rate cut. Additionally, the Industrial Production Index (IIP) data and festive season sales figures will serve as important catalysts,” remarked Santosh Meena, Head of Research at Swastika Investmart.
Internationally, macroeconomic data from the US, fluctuations in the dollar index, and crude oil prices will influence near-term market direction. Foreign Institutional Investor (FII) flows remain a key factor in determining market trends, Meena added.
Last week, the BSE Sensex experienced a significant decline of 2,199.77 points, or 2.66 percent, while the NSE Nifty fell by 672.35 points, or 2.65 percent.
Vinod Nair, Head of Research at Geojit Investments Limited, commented, “Indian equities concluded the week on a subdued note, facing widespread sectoral declines. The Information Technology (IT) sector came under initial pressure due to concerns regarding rising H-1B visa costs, further exacerbated by Accenture’s cautious outlook. Market sentiment deteriorated with the implementation of new US tariffs on pharmaceutical products, prompting a notable sell-off in pharma stocks. Mid- and small-cap stocks saw sharper corrections than large caps, indicative of stress from inflated valuations.”
The rupee continued to weaken due to persistent FII outflows and escalating geopolitical tensions tied to US trade actions. In contrast, gold maintained its status as a safe-haven asset, bolstered by global trade uncertainties, a depreciating rupee, ongoing central bank purchases, and the unpredictable trajectory of the Federal Reserve’s policy, Nair explained.
Siddhartha Khemka, Head of Research at Wealth Management for Motilal Oswal Financial Services Ltd, stated, “In terms of macroeconomic indicators, markets will focus on the RBI’s interest rate decision on October 1, along with US consumer confidence data and the manufacturing PMIs from India, China, and the US.”
Published on September 28, 2025.
