Market Overview
Indian equity markets faced significant headwinds, with the Nifty 50 and Sensex extending their losing streak to six to eight consecutive sessions, driven by persistent foreign institutional investor (FII) outflows totaling ₹5,687–19,570 crore, global uncertainties from US tariff threats, Fed rate cut speculations, and domestic caution ahead of the RBI policy meeting. The Nifty struggled with key support at 24,400–24,600 and resistance at 24,800–25,000, while technical indicators like MACD and RSI remained bearish, prompting analysts to advise selling on rises. However, the market showed pockets of strength, with robust IPO activity—including oversubscribed issues like Tata Capital, TruAlt Bioenergy, and Urban Company—and sectoral gains in defence (e.g., BEL, HAL), oil & gas (e.g., HPCL, BPCL), renewables, and midcaps. Domestic institutional investors (DIIs) provided support with inflows of ₹3,846–5,843 crore, and commodities like gold and silver surged to record highs. Overall sentiment is mixed, balancing bearish pressures with opportunities in specific sectors and new listings.
Key Sectors in Focus
Defence and Aerospace (UP)
Defence stocks like Bharat Electronics (BEL) and Hindustan Aeronautics (HAL) showed bullish momentum, driven by strong order books—BEL's exceeded ₹1 lakh crore with new deals like the ₹30,000 crore missile tender—and technical breakouts. Analysts recommended buys for long-term growth, citing government initiatives and export potential.
Oil and Gas (UP)
The sector surged up to 4%, led by oil marketing companies (OMCs) like HPCL, BPCL, and Indian Oil, supported by government clarity on fuel pricing reforms, strong quarterly results (e.g., HPCL's revenue and profit growth), and dividend declarations. Positive brokerage views and index inclusions fueled investor confidence.
Banking and Financial Services (MIXED)
Bank Nifty experienced volatility with support at 53,500–54,000 and resistance at 54,750–55,200, influenced by RBI policy expectations and FII selling. PSU banks like SBI showed resilience, while private banks like Kotak Bank and Axis Bank faced pressure. NBFCs saw activity with Tata Capital's large IPO, and initiatives to address MSME credit gaps provided stability.
Information Technology (DOWN)
IT stocks declined due to US H-1B visa fee hikes and tariff threats, leading to sector-wide corrections and layoffs (e.g., TCS). Weak global guidance and trade tensions overshadowed minor rebounds, though companies with US facilities may avoid direct impacts.
Pharmaceuticals (MIXED)
The sector faced headwinds from US tariffs, but strategic acquisitions (e.g., Lupin's purchase of VISUfarma) and exemptions for generics provided relief. Stocks like Sun Pharma and Cipla showed resilience, with mutual fund investments and positive growth prospects in specialty drugs.
Automotive (MIXED)
Mixed trends prevailed, with festive demand and GST cuts boosting sales for Maruti Suzuki and Hyundai, but cyberattacks on Tata Motors' JLR and profit-booking in overbought stocks like Maruti created volatility. EV initiatives and government mandates supported long-term optimism.
Midcap (MIXED)
Midcaps exhibited sharp volatility, with gainers like GE Vernova, Phoenix Mills, and Bharat Forge surging on index inclusions and corporate actions, while decliners like Dixon Technologies and Jindal Stainless fell due to profit-taking and broader market caution. High trading volumes amplified movements.
Renewable Energy and Green Tech (UP)
Strong growth driven by government policies, IPO frenzies (e.g., TruAlt Bioenergy), and expansions in solar and ethanol production. Companies like Premier Energies and Waaree Energies received bullish analyst ratings, supported by India's 500GW renewable goal and investments in semiconductors.
Real Estate and Infrastructure (UP)
Sector gains were fueled by projects like Hiranandani's township and IRFC's loan sanctions for power infrastructure, with stocks like Vascon Engineers and Prestige Estates rising on MoUs and strong financials. Public capex and trade pacts supported outlook.
Stock Spotlight
| Company | Movement | Insight |
|---|---|---|
| Bharat Electronics (BEL) | 2.27% rise to ₹404.90 | BEL led Nifty gainers, securing a ₹30,000 crore missile order from the Indian Army and boosting its order book to over ₹1 lakh crore. Strong quarterly EBITDA growth of 32.2% and bullish technical patterns make it a key defence play amid market volatility. |
| HPCL | 3.60% surge to ₹437.45 | HPCL rallied on robust Q2 FY25 results with revenue of ₹110,825.33 crore and net profit of ₹4,222.21 crore, alongside a final dividend and bonus issue. Inclusion in Nifty Midcap 150 and positive brokerage views drove investor confidence in OMCs. |
| Tata Motors | 1.3% rise to ₹672.9 | Shares gained after the UK government guaranteed a £1.5 billion loan for Jaguar Land Rover, offsetting cyberattack-related production halts. Strong Navratri sales and demerger plans added to mixed signals, with EBITDA estimates revised downward. |
| Lupin | 1.78% rise to ₹1,954 | Lupin's €190 million acquisition of VISUfarma strengthened its European ophthalmology portfolio, with projected revenue growth and high EBITDA margins. The move highlights strategic expansion amid US tariff concerns. |
| Vodafone Idea | 2.7% rise amid market declines | Stock gained as the company filed a Supreme Court petition seeking waiver of interest on ₹9,450 crore AGR dues, with a hearing set for October 6. Investor hope for relief persisted despite high debt of ₹2.42 lakh crore. |
| InterGlobe Aviation (IndiGo) | Expected inflows of $362M post-Nifty inclusion | IndiGo replaced Hero MotoCorp in Nifty 50, triggering anticipated institutional buying. Analysts noted a 50% probability of gains, similar to past performers, making it a watch for rebalancing effects. |
| Vascon Engineers | 13–20% surge to 52-week high | Stock soared after signing a five-year MoU with Adani Infra for Mumbai projects, expected to add 30% to annual turnover. High trading volumes indicated strong investor interest, though execution risks remain. |
Economic Indicators
Inflation
Inflation remained controlled, with forecasts of 3.1% for FY26 and potential drops to 1.1% in October due to GST reforms. However, food price shocks and global factors posed risks.
Interest Rates
RBI's repo rate held at 5.5%, with expectations of a potential 25 bps cut in October to support growth amid low inflation. Fed rate cut speculations influenced global markets, with a 90% chance priced for October.
Gdp
GDP growth strong at 6.5–7.8%, supported by domestic demand and services resilience. OECD and S&P raised forecasts, with India aiming for $5 trillion economy status.
Other Relevant Indicators
FII outflows of ₹5,687–19,570 crore contrasted with DII inflows of ₹3,846–5,843 crore; rupee hit record lows of 88.54–88.79 against USD; India VIX rose to 11.37–11.43, indicating heightened volatility; IIP growth slowed to 4% in August, with manufacturing moderation.
Global Market Influences
Global influences included US tariff and visa fee hikes pressuring IT and pharma sectors, Fed rate cut expectations boosting commodities, and geopolitical tensions from Russia and Iran driving safe-haven demand. Asian market volatility, OPEC+ supply hikes affecting oil prices, and trade deals like India-EFTA with $100 billion investments added to the mixed backdrop, contributing to FII outflows and rupee weakness.
Commodity Trends
Gold (UP)
Gold hit record highs, with domestic futures at ₹1.14–1.15 lakh per 10g and global spot prices over $3,800/oz, driven by Fed rate cut bets, geopolitical tensions, and a weak rupee. Analysts predicted further gains to $4,000/oz, with strong retail and ETF inflows.
Silver (UP)
Silver surged 62–63% to ₹1.43 lakh/kg, termed the 'standout' metal, fueled by industrial demand from solar and EVs, rate cut expectations, and supply deficits. Corrections were seen as buying opportunities.
Crude Oil (DOWN)
Oil prices fell, with Brent dropping to $69.72/barrel, due to OPEC+ supply hikes, Kurdistan export resumption, and global economic uncertainties, though supply disruptions provided occasional support.
Copper (MIXED)
Copper saw volatility with tight global supply from mine disruptions and AI demand, but profit-taking led to declines. Hindustan Copper's expansion plans positioned it for growth amid stable price forecasts.
Expert Opinions
Analysts advised caution, recommending selling on rises for Nifty amid weak PCR and volatility, with supports at 24,400–24,500 and resistance at 24,800–25,000. Bullish calls were made on defence stocks like BEL and HAL, renewables, and IPOs with high subscriptions. Experts projected RBI rate cuts to support growth, emphasized opportunities in commodities like gold and silver, and highlighted risks from US tariffs and FII outflows. Overall, predictions favored accumulation in quality large-caps and sector-specific picks while avoiding aggressive bets.
Market Outlook
Short-Term Projection
The short-term outlook is cautious with high volatility, as Nifty faces key supports at 24,400–24,600; a break below could lead to declines toward 24,000–24,180, while holding above 24,750 may trigger a rebound. The RBI policy decision, US jobs data, and global cues will be critical triggers. Sectors like defence, oil & gas, and renewables may outperform, but IT and midcaps could remain under pressure. Investors should monitor IPO performances, institutional flows, and commodity trends for direction.