The Indian stock market is set for a volatile start this week as multiple global and domestic factors weigh on investor sentiment. After a brief period of positivity last week, the market mood has turned cautious following geopolitical tensions, trade war developments, and macroeconomic uncertainties.

According to early trends, Gift Nifty was trading around 25,327 level, a discount of nearly 83 points from Nifty futures’ previous close, suggesting a gap-down opening for Indian indices on Monday.

Let’s take a deep dive into the 10 major factors influencing the Indian stock market this week, from Donald Trump’s tariff announcement on China to gold price trends, FII movements, and Q2 earnings.

1. Gift Nifty Signals Weak Start for Indian Market

Gift Nifty, the global indicator for Indian equity markets, started Monday’s session on a weak note. It was trading near 25,327, almost 83 points lower than the previous Nifty futures close, pointing toward a negative start for both Sensex and Nifty 50.

Market sentiment: Negative bias due to global uncertainty.
Indication: Gap-down opening expected.
Previous close: Nifty 50 settled at 25,285.35; Sensex ended at 82,500.82.
Reason: Global selloff triggered by fresh U.S.-China trade tensions.

The weakness in Gift Nifty reflects investor caution ahead of key macroeconomic data releases and geopolitical events.

2. Trump’s 100% Tariff on Chinese Goods Sparks Global Selloff

The biggest headline shaking global markets this week came from Washington D.C., where U.S. President Donald Trump announced an additional 100% tariff on Chinese imports.

This surprise move has reignited fears of a renewed U.S.-China trade war, leading to sharp declines in equity markets across Asia, Europe, and the U.S.

Impact on Global Equities

S&P 500 and Nasdaq recorded their worst single-day drop since April 10, 2025.
Investors shifted to safe-haven assets like gold and the dollar.
Global supply chain and export-oriented sectors came under selling pressure.

Implications for India

IT and pharma exporters could face mixed impacts due to global volatility.
Inflationary risks may rise if trade barriers disrupt supply chains.
Indian manufacturing and tech exports could benefit from U.S. diversification away from China in the long term.

3. Asian Markets Trade Lower After U.S.-China Tensions Escalate

Asian markets mirrored Wall Street’s weakness on Monday morning.
Japanese markets were closed for a public holiday, but other Asian indices saw broad-based declines.

Regional Performance Snapshot

South Korea’s Kospi: Down 1.35%.
Kosdaq: Dropped 2.24%.
Hong Kong’s Hang Seng Index futures: Indicated a lower opening.
Shanghai Composite: Down nearly 1% as traders priced in tariff shock.

The negative sentiment across Asia is expected to spill over into the Indian equity market, especially in sectors with global linkages like metals, IT, and auto.

4. U.S. Markets Ended the Week with Heavy Losses

The U.S. market’s performance last week set a bearish tone for global equities. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closed significantly lower.

U.S. Market Recap

Dow Jones: Fell nearly 2% on Friday.
S&P 500: Dropped by 2.3% — its steepest fall since April.
Nasdaq: Slumped 2.7%, driven by weakness in tech stocks.

The crash came amid renewed trade tensions, mixed U.S. jobs data, and concerns over the upcoming U.S. government shutdown risk.

The selloff in U.S. equities typically influences risk appetite globally, leading to foreign fund outflows from emerging markets like India.

5. Domestic Indices Closed Higher on Friday, But Trend May Reverse

Before the weekend, Indian benchmark indices had ended higher for a second consecutive session on Friday.

Sensex: Gained 328.72 points or 0.40%, closing at 82,500.82.
Nifty 50: Rose 103.55 points or 0.41%, to 25,285.35.

However, analysts warn that the global selloff could wipe out those gains early this week.

Expert View

“We expect Indian equities to trade in a range with a positive bias, aided by supportive global cues and sustained buying interest,” said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.

This optimism, however, could be tested if global markets continue to slide due to tariff shocks.

6. Investors Eye India’s September Inflation Data

This week, domestic investors will closely track India’s Consumer Price Index (CPI) inflation data for September 2025.

Why It Matters

CPI data will indicate whether food inflation pressures are cooling off.
It will also influence RBI’s monetary policy stance ahead of the December policy meeting.
High inflation could delay interest rate cuts, which might weigh on market sentiment.

Economists expect India’s retail inflation to remain around 5.3–5.5%, slightly above the RBI’s comfort zone but below August’s 5.7%.

7. Q2 Results Season Kicks Off: Key Earnings to Watch

The Q2 FY2025–26 earnings season begins this week, with major companies from IT, banking, and auto sectors announcing their results.

Key Companies Announcing Results

TCS, Infosys, HCLTech: Will set tone for IT sector outlook.
HDFC Bank, ICICI Bank: Will reveal lending growth and NIM trends.
Tata Motors, Maruti Suzuki: To share insights on auto demand recovery.

Strong corporate results could partially offset global negativity, while weak numbers may add to volatility.

8. Gold Prices Surge Amid Trade War Tensions

Gold prices rallied sharply over the weekend as investors sought safety amid global uncertainty.

Spot gold: Rose to $2,555 per ounce, near its six-month high.
Silver prices: Also gained over 1.2% in international markets.
In India, MCX gold futures climbed above ₹74,000 per 10 grams.

Why It Matters for Investors

Rising gold prices indicate risk aversion in markets.
Investors often move from equities to safe-haven assets during crises.
Indian households could see higher jewelry prices ahead of the festive season.

9. FII and DII Activity: Foreign Flows Turn Volatile

Foreign Institutional Investors (FIIs) have once again turned net sellers amid global uncertainty, while Domestic Institutional Investors (DIIs) continue to lend support.

Recent Data

FIIs: Sold equities worth over ₹1,200 crore last week.
DIIs: Bought nearly ₹1,800 crore worth of shares.

The tug-of-war between foreign and domestic investors will play a major role in market direction this week.

Experts say sustained DII buying could cushion downside risks for the Nifty and Sensex.

10. Key Global Events to Watch This Week

Beyond domestic data and earnings, several global macro events will shape investor sentiment in the coming days.

Global Triggers

U.S. Inflation Data: To determine Fed’s next move.
China GDP and trade data: To assess impact of new tariffs.
Crude oil price trends: Brent trading near $86/barrel amid Middle East tensions.
U.S. Government Shutdown: Potential delay could spook global markets.

Market Implication

If global risks persist, Indian markets could see a short-term correction, though medium-term fundamentals remain strong.

Market Outlook: What to Expect This Week

The coming week promises high volatility for Indian equities. The combination of Trump’s China tariffs, rising gold prices, FII outflows, and Q2 earnings releases could make investors cautious.

Nifty Technical Levels

Support: 25,200–25,000 zone.
Resistance: 25,500–25,700 levels.
Short-term view: Consolidation with downside risk.

Expert Strategy

Avoid aggressive long positions early in the week.
Focus on defensive sectors like FMCG, healthcare, and utilities.
Track IT and banking stocks for post-results opportunities.

Sector-Wise Outlook

IT Sector

Could see initial weakness due to global risk-off mood.
However, stable Q2 results from top firms may provide support.

Banking & Financials

Expected to remain resilient due to strong credit growth.
Investors should watch NIM trends and asset quality updates.

Auto Sector

Festive season demand and easing supply constraints support outlook.
Stocks like Tata Motors, Hero MotoCorp, and Maruti could outperform.

Metals

Likely to remain under pressure amid tariff-related global slowdown fears.

Pharma

May benefit as investors seek defensive plays amid volatility.

Investment Strategy for the Week

Here’s how investors can navigate the market this week:

Short-Term Traders

Focus on intraday opportunities in volatile sectors.
Use stop-loss orders to manage risks.
Keep positions light ahead of CPI and earnings data.

Long-Term Investors

Use market dips to accumulate quality stocks in banking, IT, and auto.
Focus on companies with strong fundamentals and healthy cash flows.
Maintain a diversified portfolio to hedge against global risks.

Commodity & Currency Watch

Crude Oil

Prices remain volatile amid geopolitical tensions in the Middle East.
Rising oil prices could put pressure on India’s import bill and rupee.

Gold & Silver

Likely to remain elevated as investors hedge against market volatility.

Indian Rupee

May weaken slightly against the U.S. dollar if global sentiment remains risk-averse.
RBI intervention could help stabilize currency fluctuations.

IPO Buzz and Market Liquidity

The primary market remains active with several IPOs lined up this week, which could impact secondary market liquidity.

Upcoming IPOs

Two SME IPOs and one mainboard issue expected.
Strong investor response may reflect underlying optimism in certain sectors.

However, analysts caution that liquidity could tighten if subscription volumes remain high.

Expert Opinions

Anand Rathi Wealth

“Market may see short-term pressure, but India’s growth story remains intact. Long-term investors should not panic over global noise.”

Kotak Institutional Equities

“Q2 earnings will determine the next leg of the rally. Stable results from IT and banks can offset external headwinds.”

HDFC Securities

“Focus remains on inflation, foreign fund flows, and global risk appetite. Expect volatility to persist in the short term.”

Conclusion

The Indian stock market is poised for a volatile and cautious start to the week as global and domestic cues send mixed signals.
While Gift Nifty trends point to a lower opening, the long-term fundamentals of the Indian economy remain strong.

Key triggers to watch this week include:

U.S.-China tariff war developments
India’s September inflation data
Q2 corporate earnings
Gold and crude oil price movements
FII-DII activity and rupee trends

Investors are advised to stay alert, manage risk, and avoid speculative trades during this highly eventful week.