Analysts believe a sustainable recovery will depend on improving market breadth, stable crude oil prices and stronger follow-through buying.
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The Indian stock market is expected to remain volatile this week as global geopolitical risks remain high and elevated energy prices continue to weigh on investor sentiment. The flow of foreign capital and movement in US Treasury yields are also likely to keep investors cautious.
The equity benchmark indices, Sensex and Nifty 50, snapped their eight-week losing streak and ended higher last week, amid short-covering and value buying after the sharp correction.
This week, investors will track inflation data from India and the US, Q2 results, rupee movements, FII flows, among other key factors. The speech by US Federal Reserve Chair Kevin Warsh will also be watched out for.
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Here are five key factors that may drive Dalal Street this week:
1. Inflation Data
Market participants will track key inflation data from India and the US scheduled to be released this week.
India’s Consumer Price Index (CPI) inflation data for September will be released on October 12, and the Wholesale Price Index (WPI) inflation data is set to be released on October 14.
US inflation data will also be released this week on Wednesday, October 14, which investors will focus on for further cues on the future interest rate trajectory by the Federal Reserve.
Other key macroeconomic data to be released this week include, US retail sales, Producer Price Index (PPI) data for September, and initial jobless claims.
US Federal Reserve Chair Kevin Warsh is also set to deliver a speech, which markets will closely watch.
Inflation data from Europe will be released on Friday, while that from China will also be released on Wednesday this week.
2. Q2 Results
A host companies will deliver their earnings for the second quarter of FY27 this week. These include HCL Technologies, HDFC Bank, ICICI Bank, Axis Bank, Tech Mahindra, Wipro, Yes Bank, Nestle India, Hero Motors, EBL Bank, Billionbrains Garage Ventures, HDFC Life Insurance Company, Bharat Heavy Electricals (BHEL), Tata Technologies, Canara Bank, among others.
3. Crude Oil Prices
The trends in crude oil prices will also drive the market sentiment this week, as elevated energy prices pose a significant risk to oil-importing nation like India and impact the corporate earnings.
Brent crude futures declined 1.67% to $102.97 a barrel, while US West Texas Intermediate crude was at $90.08 a barrel, down 1.93%.
4. FII Flows
The flow of foreign capital in the Indian stock market will continue to impact the sentiment. Foreign Portfolio Investors (FIIs) have sold Indian stocks worth Rs 44,166 crore in October so far, taking the total outflows in 2026 to Rs 3,04,468 crore.
5. IPO Buzz
The primary market will remain abuzz this week, with around seven companies set to hit Dalal Street with their initial public offerings (IPOs). These include five mainboard IPOs and two SME IPOs.
HD Fire Protect IPO will open on October 13 and Fusion CX IPO will commence on October 14. The IPOs of Sahajanand Medical Technologies, Zetwerk Manufacturing Business and Tonbo Imaging India will open on October 15.
Market Strategy
Last week, the benchmark Nifty 50 rebounded 0.44% after declining for eight consecutive weeks, finding support near its trendline support and the 100-week EMA.
Analysts believe this recovery from oversold territory offers some relief and raises the possibility of a short-term technical rebound.
Sensex Outlook
Sensex formed a Doji candle on the weekly timeframe, indicating indecision in the broader trend.
Options data indicates that 72,000 Put writers hold the highest OI concentration on the lower side, making this an important support level. On the upside, 73,000 Call writers continue to hold the highest OI, creating a significant resistance zone.
“The PCR at 1.10 suggests a relatively balanced options setup with a slight positive tilt. The sustainability of Put writing near 72,000 and any unwinding of Call positions near 73,000 will be important in determining the next directional move,” said Sachin Gupta, VP – Technical Research at Choice Equity Broking.
According to him, Sensex has shown encouraging signs of recovery, but the broader structure remains sideways until a decisive breakout emerges. Holding above 71,700 – 72,000 could support further upward movement towards 72,800 – 73,100, while rejection near resistance may lead to renewed consolidation.
“The improving RSI and strong daily close indicate that buying interest is returning, although the weekly Doji signals that confirmation is still needed. Traders should monitor the 73,000 zone closely, as a sustained move above it could strengthen bullish momentum, whereas a fall below 71,700 may weaken the recovery,” said Gupta.
Nifty 50 Outlook
According to Dr. Ravi Singh, Chief Research Officer from Master Capital Services Ltd., as long as the weekly low around 22,150 – 22,200 remains intact, the index could extend its recovery towards 22,750, followed by 23,000, near the 21-day EMA.
“However, the broader trend remains weak, and the rebound should be viewed cautiously until the index reclaims key resistance levels. Sustained buying momentum will be crucial to confirm a stronger recovery,” said Singh.
Bank Nifty Outlook
Bank Nifty outperformed and rallied 1.48% but continues to trade below its 21-day and 55-day EMAs and key resistance levels.
“For a sustained recovery, Bank Nifty needs to reclaim its 21 day EMA near 55,520, above which a move towards 56,200 is possible. As long as the index holds above its recent swing low of 53,800, a cautious buy on dips strategy near 54,700 may be considered, with disciplined risk management,” Singh said.
Market Strategy
The eight-week losing streak has ended, but the broader correction may not be over. Analysts believe a sustainable recovery will depend on improving market breadth, stable crude oil prices and stronger follow-through buying.
“While India’s growth outlook continues to provide support, elevated global yields and energy-related risks remain challenges for valuations and investor confidence,” said Ajit Mishra, SVP – Research, Religare Broking.
He advises traders to remain selective, avoid excessive leverage and adhere to disciplined risk management.
“Investors should prioritise companies with resilient earnings, strong balance sheets and pricing power, while considering staggered accumulation at appropriate valuations,” Mishra added.
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