The trading week starting tomorrow from September 29 to October 3, 2025, the Indian stock market will experience volatile trading following the presence of multiple domestic as well as global factors affecting the sentiments of investors. The market sentiment remains cautioned after the Nifty 50 and Sensex closed last week on a downtrend following significant selling pressure in IT, pharma, and metal stocks. Nifty ended close to 24,654 levels on a sixth straight red day on Friday, with bearish technical charts signifying short-term risks for the downside. The Bank Nifty also came under selling pressure, closing below 55,000. India VIX, the volatility measure, jumped 6% for the week, showing that traders are more nervous than before. There will be a market holiday on 2nd October i.e. Thursday in the upcoming next week, on the account of Gandhi Jayanti and Dushehra, so the market will be active for four days in the entire week. The Q2 results would also start coming from the next month.
FII-DII Activity
Foreign Institutional Investors (FIIs) continued to sell equities, with net outflows exceeding ₹5,600 crore on September 26 alone, building up a large cumulative sell-off for this month of more than ₹30,000 crore. On the other hand, Domestic Institutional Investors (DIIs) remained consistent buyers, offering some relief with net buying of approximately ₹5,800 crore during the same period. This trend highlights the market’s reliance on firm domestic buying interest in the face of foreign pressure selling.
Global Factors
Global signals are still mixed and continue to affect the Indian markets. The US Federal Reserve’s rate policy stance, as well as continuing US-India trade tensions with tariffs and H1-B visa fee increases, are a drag on industries like IT and pharma. Geopolitical tensions in the Middle East and rupee depreciation contribute to external risks. Optimism, however, is around anticipated corporate earnings as well as potential enhancement in trade talks. Global markets have been volatile with divergent performances in Asia and Europe, impacting domestic indices sentiment.
Sectoral Performance and Key Drivers
There was significant fall several sectors viz. IT (-2.45%), pharma (-2.14%) and metal (-1.93%) sectors in last week due to concerns over tariffs as well as global uncertainty. Banking and finance indices also declined with Nifty Bank down more than 1%. Mid-cap and small-cap stocks experienced deeper corrections as there was risk-off sentiment. On the positive side, some selected realty, energy and telecom stocks may witness value buying next week, as their fundamentals are still in place. Investors will be keenly observing the earnings of major firms across industries from early October, which may offer directional insights.
Other Relevant Factors
The Reserve Bank of India policy outcome soon is highly anticipated as decisions on interest rates and inflation projections will have a direct bearing on market confidence. Traders are likely to see greater volatility as they incorporate RBI announcements, quarterly earnings season, and global macroeconomic releases. The festive season is also starting, which traditionally fosters positive consumer sentiment and market flows.
What to Expect
Overall, the equities market outlook for September 29 to October 3, 2025, is guarded with volatility possible. Further FII selling combined with international uncertainties balanced by robust DII buying and earnings expectations will be likely to drive market dynamics. Marketers should remain cautious, keep a watch on key support at Nifty 24,500 and observe sectoral events keenly for opportunities through volatility.
