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Foreign fund outflows, concerns over Iran-US conflicts drag markets lower for the week
Oct-01-2026

Indian markets crashed during holiday-shortened week, sliding nearly 3% as volatile oil prices and bond yields weighed on sentiment. Traders remained cautious amid uncertainty over Iran-US conflicts. Persistent foreign fund outflows and rupee weakness added to the market pressure. Traders avoided risky bets ahead of the long weekend.

Some of the major developments during the week are:

India’s industrial growth rises to 8.0% in August: The MoSPI in its quick estimates has shown that industrial growth rose to 8.0 percent in the month of August 2026 (Base 2022-23=100) from a revised growth of 7.4 percent in July 2026 led by robust growth in manufacturing and electricity generation.

FDI equity inflows in India rises 6% to $19.81 billion in Q1FY27: The Department for Promotion of Industry and Internal Trade (DPIIT) data has shown that foreign direct investment (FDI) equity inflows in India rose 6 per cent to $19.81 billion in April-June quarter (Q1) of current fiscal year 2026-27 (FY27).

India's merchandise exports increase by 15% up to September 21 this fiscal: Commerce and Industry Minister Piyush Goyal has said that India's merchandise exports increased by 15 per cent up to September 21 in FY27 despite global economic uncertainties stemming from the ongoing US-Iran conflict.

MoSPI’s ISP shows 17 out of 19 sub-sectors record positive growth in July: The MoSPI has released Index of Services Production (ISP) for July 2026, which shown that 17 out of the 19 sub-sectors recorded positive growth, while 10 sub-sector recorded double-digit growth during the same period.

India’s manufacturing PMI rebounds to 55.1 in September: India’s manufacturing sector gained strong momentum in September, with faster increases in new orders. HSBC India Manufacturing Purchasing Managers’ Index (PMI) jumped from 52.8 in August to 55.1 in September.

BSE movement for the week

The Bombay Stock Exchange (BSE) Sensex slipped 1986.04 points or 2.69% to 71,909.70 during the week ended October 01, 2026. On the sectoral front, S&P BSE Auto was down by 3,284.32 points or 5.51% to 56,364.06, S&P BSE Consumer Durables was down by 3,243.55 points or 5.31% to 57,809.46, S&P BSE Consumer Discretionary Goods & Services was down by 418.52 points or 4.25% to 9,440.35, S&P BSE Fast Moving Consumer Goods was down by 724.13 points or 4.17% to 16,651.28 and S&P BSE Metal was down by 1,723.48 points or 4.17% to 39,634.33 were the top losers, while S&P BSE Information Technology was up by 55.06 points or 0.20% to 27198.78 was the only gainer on the BSE.

NSE movement for the week

The Nifty slipped 718.55 points or 3.11% to 22,421.95. On the National Stock Exchange (NSE), Nifty Next 50 lost 2797.30 points or 3.90% to 68,981.35, Bank Nifty was down by 1129.65 points or 2.03% to 54,450.75 and Nifty Mid Cap 100 decreased 2174.00 points or 3.57% to 58,732.00, while Nifty IT was up by 143.80 points or 0.51% to 28,304.70.

FII transactions during the week

Foreign Institutional Investors (FIIs) were net sellers in equity segment in the week, with gross purchases of Rs 65,014.52 crore and gross sales of Rs 92,976.11 crore, leading to a net outflow of Rs 27,961.59 crore. They also stood as net sellers in the debt segment with gross purchases of Rs 6,277.82 crore against gross sales of Rs 14,907.90 crore, resulting in a net outflow of Rs 8,630.08 crore. In hybrid segment, FIIs stood as net buyers, with gross purchases of Rs 588.32 crore and gross sales of Rs 473.34 crore, leading to a net inflow of Rs 114.98 crore.

Industry and Economy

Citing expectations of strong growth in the April-September period, domestic rating agency Crisil has raised its FY27 GDP growth estimate for India to 7 per cent from its earlier projection of 6.6 per cent. Crisil Chief Economist D K Joshi said the revision was driven by expectations of robust growth in the first half, with GDP growth in Q1 estimated at 7.8 per cent. He said “The economy is doing well. We expect the first half to witness strong growth, while growth will slow in the second half”. Joshi said the agency has assumed crude oil prices to average between $87 and $93 per barrel in FY27, compared with $70 per barrel in FY26, while making its growth projections. Crisil expects the RBI to raise the policy rate by 25 basis points each in October and December.

Outlook for the coming week

Benchmark indices ended lower in the passing week as foreign institutional investors continued their selling in domestic markets amid uncertainty over US-Iran conflicts. 

In the coming week, investors will be closely for the Reserve Bank of India’s (RBI) interest rate decision slated to be announced on October 07, after three-day meeting from October 5. On the economic data front, traders will be eyeing HSBC Composite PMI Final and HSBC Services PMI Final to be out on October 06. Meanwhile, Foreign Exchange Reserves data is going to be out on October 09.

On the global front, investors would be eyeing economic data from United States (US) starting with S&P Global Composite PMI Final and ISM Services PMI on October 05, followed by Balance of Trade data and Redbook on October 06, API Crude Oil Stock, Fed Logan Speech, EIA Crude Oil Stocks and FOMC Minutes on October 07, Initial Jobless Claims on October 08, Michigan Consumer Sentiment and Baker Hughes Oil Rig Count on October 09.

Top Gainers 

  • Infosys up by 1.42% was the top gainer on Nifty for the week - Infosys traded with traction supported by valued buying at lower levels following the recent losses due to rising expectation of another interest rate hike by US Federal Reserve. Higher rates weigh on discretionary IT spending in which affects the earnings of Indian IT companies as majority of their clientele are based in US. 
  • Kotak Mahindra Bank up by 1.23% was another top gainer on Nifty for the week - Shares of Kotak Mahindra Bank traded higher after the Reserve Bank of India (RBI) approved appointment of Mr. Anup Kumar Saha as the new Managing Director & CEO of the Bank, for a period of three years, with effect from January 1, 2027.

Top Losers 

  • Bajaj Auto down by 11.89% was the top loser of the week on Nifty - Shares of Bajaj Auto came under pressure after its September sales numbers failed to match street estimates. The company reported rise of 5% in total sales to 5,38,443 units in September 2026 as against 5,10,504 in the same month last year. However, total domestic sales decreased by 9% to 2,94,456 units in September 2026 as compared to 3,25,252 units in September 2025.
  • Max Healthcare Institute down by 11.22% was another top loser of the week on Nifty - Max Healthcare Institute faced selling pressure, along with other hospital stocks, as Supreme Court's observations sparked concerns of tighter regulation of medicine mark-ups at private hospitals. The Supreme Court asked the government to examine the issue, including the possibility of a uniform margin on medicines.

Technical viewpoints

During the week, CNX Nifty touched the highest level of 23,162.70 on September 28 and lowest level of 22,217.30 on October 1. On the last trading day, the Nifty closed at 22,421.95 with weekly loss of 718.55 points or 3.11 percent. For the coming week, 22,038.60 followed by 21,655.25 are likely to be good support levels for the Nifty, while the index may face resistance at 22,984.00 and further at 23,546.05 levels.

US Market

The U.S. markets traded lower during the week amid uncertainty over the prospects for a peace deal between the U.S. and Iran. Meanwhile, concerns about inflation reinforced expectations of tighter monetary policy from the Federal Reserve.

Some of the major developments during the week are:  

Consumer Confidence Index eases in September: The US consumer confidence index slumped to 81.9 in September from a downwardly revised 88.6 in August. The street had expected index to inch up to 90.0 from 89.4 originally reported for previous month.

Number of job openings in US falls in August: The number of job openings in the US fell by 256,000 to 7.079 million in August 2026, the lowest in five months, compared to an upwardly revised 7.335 million in July and forecasts of 7.23 million.

US core PCE price index increases 0.2% in August: The US core PCE price index, the Federal Reserve’s preferred measure of underlying inflation, increased 0.2% month-on-month in August 2026, coming in below the 0.3% rise expected by markets. 

US economy expands at 2.2% in Q2 2026: The US economy expanded at an annualized rate of 2.2% in Q2 2026, revised up by 0.7 percentage point from the 2nd estimate, following an upwardly revised 2.5% growth in Q1.

US crude oil stocks unexpectedly rise: US crude inventories rose by 0.922 million barrels to 427.3 million barrels in the week ended September 25, against market expectations for a 0.3 million-barrel draw.

European Market

European markets witnessed sharp losses during the passing week, due to higher bond yields and rising oil prices amid lingering uncertainty about Iran and the U.S. reaching a deal to end their conflict and pave the way for the reopening of the Strait of Hormuz.

Some of the major developments during the week are:

Eurozone economic sentiment weakens: The economic sentiment index dropped to 97.9 in September from 98.4 in the previous month. The score was forecast to rise to 99.0.

German inflation highest since December 2023: The consumer price index rose 3.3 percent year-on-year in September following a 2.9 percent increase in August.

Italy inflation climbs to 3-year high: Consumer price inflation climbed to 4.2 percent in September from August's 3.3 percent. The expected increase was 3.8 percent. 

French inflation rises in September: Consumer price inflation rose to 3.0 percent in September from 2.4 percent in August. A similar higher rate was last seen in February 2024.

Spain retail sales fall for second month: Seasonally adjusted retail sales at constant prices fell 0.4 percent year-on-year in August, same as in July. This was mainly driven by a 6.7 percent slump in sales at service stations.

Asian Market

Asian markets traded mostly in red during week, amid rising concerns about inflation and interest rates as oil prices climbed higher and bond yields remained elevated due to geopolitical tensions.

Some of the major developments during the week are:

Japan's manufacturing PMI moderates to 54.1 in September: The S&P Global Japan Manufacturing PMI was confirmed at 54.1 in September 2026, matching the preliminary estimate and easing from 54.9 in the previous month.

Japan industrial output sinks 1.7% in August: Japan’s industrial production fell 1.7% month-over-month in August 2026, deepening from a 0.2% drop the prior month and missing market forecasts of a 1.7% rise.

South Korea manufacturing growth accelerates in September: The S&P Global South Korea Manufacturing PMI rose to 53.9 in September 2026 from 52.3 in August, marking the strongest expansion since May.

South Korea posts record trade surplus in September: South Korea’s trade surplus widened sharply to a record high of $49.85 billion in September 2026, up from $9.48 billion in the same month a year earlier.

China factory activity grows at fastest pace in 5 months in September: The RatingDog China Manufacturing PMI increased to 52.1 in September 2026 from 51.5 in August, surpassing forecasts of 51.6. It was the strongest expansion since April.
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