The bleeding hasn’t stopped. The Nifty 50 dropped 718.55 points last week, a 3.10% decline that extended its losing streak to eight sessions. The Sensex wasn’t far behind, sliding 2.68% or 1,986.04 points. September was brutal: the Sensex shed 5.81% and the Nifty lost 6.00%, a trend driven almost entirely by foreign institutional investor (FII) exit, a weakening rupee, and sticky global yields.
This week, all eyes turn to the Reserve Bank of India. The monetary policy decision is the primary domestic catalyst. Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, noted that the central bank’s stance on inflation and growth will dictate the near-term trajectory for interest rates. Investors are hunting for any hint of a hawkish tilt, especially with global headwinds intensifying. Shortly after, the US Federal Open Market Committee (FOMC) minutes will offer clues on whether American policymakers support further tightening beyond the September hike.
Earnings season kicks off with a heavyweight. TCS reports its Q2 results on October 8, setting the tone for the broader IT sector. DMart is also on the list, with retail investors watching closely for margin trends in a high-inflation environment. Simultaneously, India’s final HSBC Services and Composite PMI readings for September drop on October 6, providing a critical pulse check on economic momentum before the RBI convenes.
The external shock remains crude oil. Brent crude hovering above $100 a barrel is squeezing India’s external balances and feeding the inflation fire. Ponmudi R, CEO of Enrich Money, called it the most immediate macro concern. If geopolitical tensions keep energy risk premiums elevated, the rupee will struggle, and FII flows will likely remain negative. Global bond yields compound this; a rise in US Treasury yields makes American assets more attractive, accelerating portfolio reallocation away from emerging markets like India.