Indian stock markets are set for a potentially volatile session on Monday, October 5, after the benchmark indices suffered their eighth consecutive weekly decline. A stronger GIFT Nifty is pointing to a positive opening, but elevated crude prices, heavy foreign selling, high US bond yields and a weak rupee remain major risks for investors.
GIFT Nifty Signals Positive OpeningGIFT Nifty was trading around 22,610–22,640 in early trade, indicating that the Sensex and Nifty could open higher on Monday.
However, the positive opening signal comes after a prolonged period of weakness. The Nifty 50 closed at 22,421.95 on October 1, while the Sensex ended at 71,909.70.
The October 2 session was a market holiday for Gandhi Jayanti.
Nifty Has Lost for Eight Straight Weeks
The Nifty’s eight-week losing streak is the longest in roughly 25 years.
During the holiday-shortened week, the Nifty fell about 3.1%, while the Sensex declined around 2.7%. Persistent foreign selling, expensive crude, a weaker rupee and rising global bond yields have kept investors cautious.
The latest decline has also pushed the broader market into an oversold zone, raising the possibility of a short-term technical rebound. However, analysts continue to warn that a rebound may not signal a confirmed trend reversal.
FII Selling Remains a Major Concern
Foreign institutional investors remained aggressive sellers.
FIIs sold around ₹9,484 crore of Indian equities on October 1, marking their sixth consecutive session of selling. Their combined selling over those six sessions exceeded ₹43,000 crore.
Domestic institutional investors provided a significant counterweight, buying more than ₹10,000 crore of equities during the same session.
The continuing gap between foreign selling and domestic institutional buying will remain one of the most important signals for the market this week.
Crude Oil Still Above $100
Oil prices remain a major risk for Indian equities.
Brent crude was recently trading around $102–$103 a barrel, while US West Texas Intermediate crude was around $90–$92 a barrel.
The Middle East conflict and disruption around the Strait of Hormuz have kept concerns over global energy supplies elevated. OPEC+ also decided on October 4 to keep its November production targets unchanged, while actual output from key producers remains below official quotas.
For India, expensive crude can increase the import bill, put pressure on the rupee and complicate the inflation outlook.
US Bond Yields and Rupee Under Pressure
Global bond markets remain another major concern.
The US 10-year Treasury yield has climbed above 5%, reaching levels that have increased pressure on emerging-market assets.
At the same time, the Indian rupee has weakened sharply against the US dollar. A stronger dollar combined with high US yields can encourage foreign investors to move money away from emerging markets such as India.
This combination could keep volatility elevated even if domestic economic indicators remain relatively stable.
Wall Street Gives Some Relief
US markets provided a more supportive signal going into Monday.
On Friday, the Dow Jones Industrial Average rose 0.49%, the S&P 500 gained 0.73%, and the Nasdaq Composite advanced 1.19%.
The rally followed weaker-than-expected US employment data, which reduced expectations of another Federal Reserve rate hike in the near term.
The positive Wall Street close and gains in Asian markets could provide some initial support to Indian equities.
Asian Markets Mostly Higher
Asian markets were broadly positive in early trading on Monday.
Japan’s Nikkei 225 was up more than 1.7%, while Australia’s ASX 200 also gained. Markets in China and South Korea were closed for holidays.
The positive Asian cues are supporting expectations of a stronger opening on Dalal Street.
However, domestic investors are likely to remain focused on crude oil, institutional flows and the rupee rather than relying only on the opening trend.
Nifty Support and Resistance Levels
Technical levels will be closely watched after the recent decline.
According to market analysts, 22,600 is an important resistance zone for the Nifty. A sustained move above this level could open the way toward 22,800.
On the downside, 22,200 is an immediate support level. A decisive break below it could expose the index to the 22,000 zone.
This makes the 22,200–22,600 range particularly important during Monday’s session.
Bank Nifty Levels
Bank Nifty also remains under pressure after the recent correction.
The 53,800–53,700 region has been identified as an important support zone. On the upside, 55,000–55,200 could act as resistance.
A sustained move above 55,200 could improve the short-term technical setup, while a break below support could increase selling pressure.
RBI Policy Meeting Begins
The Reserve Bank of India’s Monetary Policy Committee meeting begins on October 5 and concludes on October 7, with the policy decision expected on October 7.
Investors will closely monitor the RBI’s assessment of inflation, economic growth, the rupee and the impact of higher crude prices.
With global bond yields elevated and oil prices under pressure, the central bank’s policy guidance could become an important market trigger.
Q2 Earnings Season Comes Into Focus
The September-quarter earnings season is also beginning.
Investors will watch company results and management commentary for signs of pressure from higher input costs, currency movements, weaker demand and geopolitical uncertainty.
Technology companies, banks, automobiles and other major sectors could see increased attention as companies begin reporting their second-quarter numbers.
What Traders Should Watch
The key factors likely to determine Monday’s market direction are:
• GIFT Nifty and the opening gap
• FII and DII activity
• Brent crude and Middle East developments
• Rupee-dollar movement
• US Treasury yields
• RBI policy signals
• Q2 earnings expectations
• Nifty’s 22,200 support and 22,600 resistance
A positive opening alone may not be enough to change the broader market trend. After eight consecutive weekly declines, investors are likely to watch whether buying continues through the session or whether early gains are sold into.
The immediate outlook therefore remains volatile and cautious, with global macroeconomic risks continuing to dominate sentiment.
Source attribution: Reuters, Associated Press, Financial Express, Moneycontrol, Economic Times, NDTV Profit, Livemint and other market reports.
