Global trade developments, US policy actions may inject short-term volatility; Fed’s recent 25-bps rate cut, prospects of further easing to bolster FII inflows 

The market momentum is expected to be supported by strong H2FY26 earnings and seasonal demand tailwinds, though global trade developments and US policy actions could inject short-term volatility. 

The Fed’s recent 25-bps rate cut, coupled with prospects of further easing, is likely to bolster FII inflows into emerging markets. Notably, India’s valuation premium over its EM peers has moderated, creating room for incremental foreign allocations and reinforcing a constructive near-term outlook.

According to Vinod Nair, head of research at Geojit Investments, India’s valuation premium over its EM peers has moderated, creating room for incremental foreign allocations and reinforcing a constructive near-term outlook. The investor-sentiment will be guided by macroeconomic data, global trends and quarterly earnings from IT major TCS this week.   

“This week will be pivotal as the Q2 FY26 earnings season gets underway, with IT bellwether TCS scheduled to announce results on Thursday, October 9. On the macroeconomic front, the release of HSBC services and composite PMI, along with banking sector data on loan and deposit growth, will be closely monitored. 

“Primary market activity is set to remain strong, with large IPOs lined up,” Ajit Mishra-SVP, Research, Religare Broking, said. Globally, key US macroeconomic updates-including the FOMC jobless claims, and consumer sentiment data-will be in focus, especially against the backdrop of the ongoing government shutdown that has already delayed some economic releases. Meanwhile, movement of rupee-against the US dollar would also be tracked by investors in the backdrop of the local currency's fall to a record low level.

The primary market is set for a busy week as two major companies, Tata Capital Ltd and LG Electronics India, gear up to launch their IPOs, collectively worth more than Rs 27,000 crore. 

The twin issues are expected to draw strong investor interest, given their scale and the stature of their parent groups. The IPOs come at a time when the Indian market is experiencing a boom in primary market activity, despite a struggling broader equity market.  In 2025, a total of 78 companies have already tapped the mainboard market through maiden public offerings, and several issues are lined up for this month.  “With macro cues stabilizing, market attention will shift to Q2 earnings and management commentary that could steer sector sentiment. 

“The IT sector will be in the spotlight as TCS kicks off the earnings calendar for the quarter ended September 2025-a period clouded by layoffs, a steep $100,000 H-1B visa fee hike, and the proposed 25% outsourcing tax by the Trump administration.

“Against this backdrop, markets will be keenly watching management’s comments on the impact of tariffs and visa costs, hiring outlook, deal wins, discretionary tech spending, and progress on AI initiatives,” Ponmudi R, CEO - Enrich Money, an online trading and wealth tech firm, said.