Fed Pause, FII Comeback & Earnings Rush: Markets Cool After Festive Highs Amid US-China Trade Tensions!

Overview

• Weekly Pullback: The BSE Sensex slipped 0.41% to close at 84,212 on October 24, while the Nifty 50 fell 0.37% to 25,795, snapping a six-day winning streak amid FMCG and pharma declines, though metals gained 1% on global commodity cues.

• Broader Markets Flat: Nifty Midcap and Smallcap indices traded sideways, with profit-booking in PSUs offset by resilience in autos and healthcare, supported by DII inflows amid festive demand.

• Flows Positive: FIIs turned net buyers for the fourth straight session, purchasing Rs 1,308 crore on October 24, extending October's cumulative inflows to Rs 1,767 crore—a welcome reversal from September's Rs 30,509 crore outflows; DIIs added Rs 1,708 crore, stabilizing sentiment.

• Global Mixed: US indices flat ahead of the Fed meeting, with S&P 500 unchanged; Asian markets edged higher, Nikkei up 0.5% on BoJ signals, while rupee held at 86.45 vs USD.

• Quarter-End Jitters: Markets eye Q3 FY26 earnings kickoff and the Fed's October 28-29 meeting, expected to hold rates at 3.75-4.00% but signal December cuts, amid US tariff probes on China adding caution.

📅 Weekly Events Calendar

💡 DO YOU KNOW?

October 2025 marks the first month of FII net inflows (Rs 1,767 crore YTD) after September's heavy Rs 30,509 crore outflows, driven by moderating inflation (CPI at 2.07%) and RBI's steady 5.5% repo rate, signaling renewed foreign confidence.

Important Observations and Market Sentiments: Editor Special

• Q3 Earnings Kickoff: Over 100 companies report, starting with IT giants TCS and Infosys on October 27; expected 4.6% growth, but banking (SBI Oct 29) and FMCG (ITC Oct 31) surprises could push Nifty toward 26,000 amid festive sales boost.

• Fed Hold Expected: The October 28-29 FOMC meeting likely maintains rates at 3.75-4.00%, with Powell's press conference (Oct 29) key for December cut signals (75% odds); dovish tone may spur EM inflows.

• Inflation Stability: August CPI at 2.07% (below RBI's 4% target) and RBI's neutral stance post-October 1 policy support easing bets; US PCE (Oct 27) at 2.6% forecast reinforces global liquidity.

• FII Rebound: Net buys of Rs 1,308 crore on October 24 reflect easing valuations and trade truce hopes; DIIs' Rs 40,000 crore monthly support acts as a buffer against any Fed surprises.

• Technicals Cautious: Nifty support at 25,500 (20-day EMA), resistance at 26,000; holding above 25,700 eyes quarter-end rally, but tariff probes risk downside to 25,200.

👀Stocks to Focus:

• IT: TCS and Infosys, for Q2 updates on US demand and AI deals amid Fed cues.

• Banking: SBI, HDFC Bank, and Kotak Mahindra, are sensitive to loan growth and rate stability.

• FMCG: ITC and Hindustan Unilever, capturing Diwali-driven rural-urban consumption.

• Metals: Hindalco, riding 1% sector gains from global commodity rebound.

📜 Summary:

The week of October 27-31, 2025, wraps Q3 with Sensex at 84,212 and Nifty at 25,795 after a mild pullback, as IT gains offset FMCG losses. Earnings from TCS, Infosys, and banks dominate, alongside the Fed's October 28-29 meeting (rate hold expected) and PCE data (Oct 27). FII inflows continue October's positive shift, buoyed by low inflation and RBI steadiness; Nifty eyes 26,000 above 25,500 support. Focus on IT, banking, and FMCG for quarter-end opportunities amid global liquidity and festive tailwinds.

🚀 Stay cautious, watch key events, and trade wisely!

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