After a challenging run in the final week of September, India’s benchmark indices are entering the new trading week under heightened scrutiny. With global headwinds and domestic developments converging, investors are closely watching five primary triggers that could shape market sentiment on Dalal Street: the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting, progress on the India-US trade deal, foreign institutional investor (FII) activity, the trajectory of the Indian rupee, and gold prices.
RBI MPC Meeting: Policy Action in a Low-Inflation Environment
The three-day RBI MPC meeting, commencing September 29 and concluding October 1, is set to dominate investor attention. RBI Governor Sanjay Malhotra is expected to announce the panel’s decision on the repo rate and outline policy guidance for the coming quarter.
With inflation dropping sharply, the State Bank of India projects CPI near 1.1% in October, and recent GST reforms reducing tax rates on several goods, analysts see room for a measured rate cut. “A 25-basis-point reduction would be a timely step to support credit growth for MSMEs and strengthen the lending ecosystem across banks, NBFCs, and fintechs,” said Rohit Arora, CEO & Co-Founder of Biz2X & Biz2Credit.
Markets will be watching not just for the rate decision, but for the RBI’s commentary on liquidity, credit flow, and the broader macroeconomic outlook.
India-US Trade Deal: Progress and Market Implications
Indian officials concluded a high-level visit to Washington last week, holding constructive discussions with U.S. counterparts to finalize a mutually beneficial trade agreement. Commerce and Industry Minister Piyush Goyal led the delegation, meeting U.S. Trade Representative Jamieson Greer and ambassador-designate Sergio Gor.
While details remain under negotiation, the market is acutely sensitive to potential outcomes, especially in sectors such as IT, pharmaceuticals, and manufacturing, where tariffs or regulatory adjustments could materially impact company earnings. Positive momentum in trade talks could catalyze a rally in export-oriented sectors.
FII Activity: Sustained Selling Pressure
Foreign institutional investors have continued a streak of equity sell-offs, offloading shares worth ₹5,688 crore on September 26 alone. Over the past year, FPIs have pulled out $21 billion from Indian equities, one of the largest outflows from emerging markets in this period.
“Elevated valuations relative to global peers and tepid earnings growth are the main reasons behind FPI withdrawals. The trend has contributed to a 3.5% depreciation in the rupee,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. Investor sentiment will remain tethered to FII flows this week, as any change in foreign demand could amplify market volatility.
Indian Rupee: Volatility and Recovery
After touching record lows, the rupee recovered slightly, closing at 88.72 against the U.S. dollar on Friday. The recovery was aided by a softer dollar and declining international crude prices.
“The rupee traded flat near 88.71 as the dollar remained rangebound. FII selling and delays in India-US trade negotiations are key sources of uncertainty. We expect the trading range for the rupee to be 88.45–89.25 this week,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Currency fluctuations could influence not only export-oriented firms but also domestic sectors heavily reliant on imported inputs, adding another layer of sensitivity for investors.
Gold Prices: A Safe Haven Under the Lens
Gold continues to offer a hedge amid global and domestic uncertainty. Spot gold prices rose 0.8% to $3,778.62 per ounce, reaching a near-record high earlier in the week. The metal gained roughly 2.5% over the past week, reflecting investor concerns about inflation and currency volatility.
“Gold traded firm at ₹1,14,000, maintaining a bullish structure with support at ₹1,12,500 and resistance at ₹1,15,000. The trend remains positive, underpinned by Fed rate speculation and macro uncertainties,” Trivedi noted.
For portfolio strategists, gold remains a key indicator of risk sentiment, often inversely correlated with equity performance.
Navigating the Week Ahead: Key Triggers Shaping Dalal Street
The Indian stock market enters the week at a critical juncture, with multiple levers capable of influencing sentiment, valuations, and trading dynamics. Dalal Street’s trajectory will hinge on the interplay of domestic policy measures, notably the RBI’s upcoming MPC decisions, alongside the pace and outcomes of India-US trade negotiations. At the same time, foreign institutional flows, currency fluctuations, and movements in safe-haven assets such as gold are likely to add layers of complexity, particularly for midcap and smallcap segments that remain highly sensitive to both domestic and global developments.
For investors, this week underscores the importance of a disciplined, strategic approach. Monitoring these five triggers is essential not just for short-term positioning, but for understanding structural shifts in India’s financial landscape. While volatility may present near-term challenges, it also highlights opportunities for those who view market movements through the lens of India’s long-term growth story — a story driven by resilient consumption, evolving policy frameworks, and the steady integration of global capital into domestic markets.
