The Indian stock market ended last week on a weak note as both Sensex and Nifty 50 faced six consecutive sessions of losses, led by global uncertainties, renewed Trump tariffs, foreign institutional investors (FIIs) selling, and rupee weakness. As Dalal Street enters a fresh week, investors will be closely watching a set of five key triggers that are expected to guide market direction: RBI MPC meeting, India-US trade deal developments, FIIs’ activity, movement in the Indian rupee, and gold price trends.
Stock Market Performance Last Week
The BSE Sensex closed at 80,426.46, down 733.22 points or 0.90%, while the Nifty 50 settled at 24,654.70, slipping 236.15 points or 0.95% on Friday, September 26.
- For the full week, the Sensex fell 2.66% and the Nifty declined 2.65%.
- Broader markets witnessed even sharper corrections, with the Nifty Midcap and Smallcap indices plunging nearly 5%.
Experts highlighted that the week turned volatile due to H-1B visa fee hikes impacting IT stocks and 100% tariffs on patented pharma imports hitting pharma counters. Despite limited direct earnings impact, the sentiment has taken a hit, raising concerns about the medium-term outlook for these sectors.
1. RBI MPC Meeting – Will the Central Bank Cut Rates?
One of the biggest events for Dalal Street this week will be the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) meeting. Investors are eagerly awaiting the RBI’s stance on interest rates amid a backdrop of moderating inflation and concerns over global growth.
- Analysts expect the RBI MPC to maintain a status quo on policy rates, while the commentary on liquidity management and inflation outlook will be key.
- Any hint of a rate cut in the coming quarters could cheer the market, while a hawkish tone may keep equities under pressure.
- Banking, financial services, and real estate stocks are likely to react the most to the outcome.
Keyword focus: RBI MPC meeting, RBI interest rate decision, RBI policy outlook, stock market triggers.
2. India-US Trade Deal Talks
Another critical factor will be the progress on the India-US trade deal, which gained momentum after Washington announced fresh tariffs on pharmaceuticals. Markets fear prolonged trade tensions may hurt Indian exports, especially in IT and pharma sectors.
- If positive announcements emerge from ongoing discussions, it could improve market sentiment.
- However, any escalation in tariffs may keep pharma and IT stocks under selling pressure.
- Investors will track official statements and bilateral meetings closely.
Keyword focus: India-US trade deal, US tariffs on pharma, Indian IT companies, stock market impact.
3. FIIs Selling Pressure
Foreign Institutional Investors (FIIs) have been on a selling spree, dampening market momentum. Last week alone, FIIs pulled out significant funds due to global uncertainties, higher US bond yields, and risk-off sentiment.
- Persistent FII outflows have been a major overhang for Nifty and Sensex.
- Domestic Institutional Investors (DIIs) have been supporting the market, but the pressure remains visible in midcap and smallcap stocks.
- If FIIs continue aggressive selling this week, markets may witness further volatility.
Keyword focus: FIIs selling, FII flows, stock market outlook, DIIs support.
4. Indian Rupee Movement Against the Dollar
The Indian rupee’s performance against the US dollar will be another key trigger. Last week, the rupee slipped due to rising crude oil prices and FII outflows, adding to market concerns.
- A further depreciation of the rupee could hurt import-heavy sectors such as oil & gas, aviation, and auto.
- Export-oriented sectors like IT and pharma may gain some cushion, but overall, volatility in the currency could weigh on equities.
- Traders will closely watch RBI’s intervention and global dollar strength.
Keyword focus: Indian rupee vs dollar, rupee depreciation, forex market impact, stock market triggers.
5. Gold Prices and Safe-Haven Demand
Lastly, gold price movement will play a role in shaping investor sentiment. With global uncertainties, especially around US trade policies and geopolitical risks, investors are shifting towards safe-haven assets like gold.
- Rising gold prices indicate risk-off sentiment in equities.
- If gold continues to gain, it could mean investors are exiting risky assets like stocks.
- Conversely, a correction in gold prices may bring some relief to Dalal Street.
Keyword focus: gold prices, safe-haven demand, global uncertainties, stock market movement.
Expert Views on Stock Market Outlook
Market analysts believe the coming week will be critical in determining near-term trends for the Indian stock market.
- Santosh Meena, Head of Research at Swastika Investmart, said:
“It was one of the toughest weeks of 2025 for Indian equities. The immediate impact of tariffs and visa fee hikes may be limited, but the uncertainty has clouded the outlook. Investors should brace for volatility as RBI MPC, India-US trade talks, and FII flows will dictate direction.”
Key Sectors to Watch This Week
- Banking & Financials: Sensitive to RBI MPC outcome.
- IT Stocks: Under pressure due to H-1B visa fee hikes and trade tensions.
- Pharma Sector: Hit by 100% US tariffs on branded drugs.
- Oil & Gas: Impact of rupee-dollar movement and crude prices.
- Gold-linked Stocks: Likely to gain from safe-haven buying trends.
Conclusion – Volatile Week Ahead for Dalal Street
The Indian stock market faces a challenging week ahead with multiple triggers ranging from domestic policy decisions to global trade tensions. Investors should prepare for high volatility as the market digests the RBI MPC outcome, India-US trade developments, FII flows, rupee movement, and gold price fluctuations.
A cautious approach with a focus on defensive sectors like FMCG and healthcare, along with selective buying in quality large caps, may help investors navigate the uncertainty.
