Market Outlook: Key Events to Shape Trading Next Week
New Delhi: The market outlook for the upcoming week is set to be heavily influenced by the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting, scheduled from October 7 to 9, as well as the release of Industrial Production Index (IIP) data and the onset of Q2 earnings season. Key companies such as TCS, IREDA, Tata Elxsi, and DMart are expected to play significant roles in driving stock-specific movements.
Market experts are closely monitoring the RBI’s policy decisions, with the announcement expected on Wednesday, October 9. Analysts predict that the RBI will maintain the benchmark repo rate at 6.5%, consistent with its last nine meetings, as the central bank aims to balance inflation control with economic growth.
“Given the current economic landscape, the RBI is likely to keep the rate steady while focusing on bringing inflation closer to its medium-term target of 4%,” experts note. In addition to the MPC outcome, market dynamics will also be influenced by Foreign Institutional Investors (FIIs) activities, the US Federal Open Market Committee (FOMC) meeting minutes, and fluctuations in crude oil prices.
The previous week saw a significant downturn in the markets, breaking a three-week winning streak, with both Nifty and Sensex plunging nearly 4.5%. The indices closed at 25,014.60 and 81,688.45, respectively. This selloff was primarily driven by a shift in foreign funds towards China, following the Chinese central bank’s substantial monetary stimulus, which included a reduction in the reserve requirement ratio (RRR) by 0.50%.
FIIs recorded net sales of equities worth Rs 40,511 crore, whereas Domestic Institutional Investors (DIIs) offset some of the selling pressure with purchases amounting to Rs 33,075 crore.
Palka Arora Chopra, Director of Master Capital Services, highlighted that the Nifty has formed a strong bearish candle on the weekly chart, indicating intense selling pressure. “The NSE benchmark has broken key Fibonacci support at 25,100, closing negatively. The next critical support level is at 24,700; a breakdown below this could lead to further declines toward 24,400,” she cautioned.
Pravesh Gour, Senior Technical Analyst at Swastika Investmart, noted that the Bank Nifty’s 100-day moving average at 51,100 serves as an immediate support level. “The 50,000-49,500 range aligns with the 200-DMA and acts as the next support zone. On the upside, 52,500 and 53,300 will be critical resistance levels during any potential pullback.”
As the market braces for these key developments, investors will be keenly watching for cues that could dictate trading strategies in the coming week.
