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Below the Weekly market outlook 01st October 2026 from Vinod Nair, Head of Research at Geojit Investments Limited

"Indian equities had a difficult, holiday-shortened week which saw benchmarks slip below a key psychological level as a worsening global backdrop overwhelmed domestic support. With the crude prices surging, US Treasury yields neared two-decade highs on expectations of further Fed tightening, narrowing the India-US yield differential and weakening the rupee. FIIs stepped up selling through the week, while steady DII buying absorbed much of the outflow, cushioning but not arresting the decline. Broader markets fell as much as frontline indices, while heavy IPO issuance drew liquidity away from listed equities. Sectoral weakness was concentrated in rate- and commodity-sensitive segments, with consumer durables, PSU banks, realty and metals under pressure, while autos saw sharper selling following weak wholesale sales data. The IT was the sole gainer, benefiting from rupee depreciation.

Looking ahead, the RBI policy decision will be the key domestic trigger, with pressure to support the rupee and contain imported inflation strengthening expectations of a rate hike. Meanwhile,  India's PMI will indicate whether domestic activity is holding up against global headwinds, while US payrolls, PMI data and FOMC minutes will shape Fed expectations and the direction of global yields. With Q2 earnings expected to be softer than Q1, sentiment is likely to remain fragile. A meaningful de-escalation in West Asia could trigger a sharp relief rally. Until then, investors should stay selective, favouring earnings visibility and balance-sheet strength, while long-term investors may use market weakness to accumulate quality names gradually."

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