Market Outlook: Fed Rate Decision, Trade Talks, and FII Trends to Steer Sensex, Nifty Next Week

New Delhi- Indian stock markets are set for an eventful week ahead, with investors closely watching global cues and domestic developments that could influence sentiment. Key triggers include the upcoming US Federal Reserve policy decision, progress on India’s trade negotiations with the US and EU, and the flow of foreign institutional investor (FII) funds.

Market analysts expect the Fed to cut interest rates by 25 basis points at its meeting, while a deeper 50 bps cut—though unlikely—would provide a significant boost to global equities, including India’s.

Trade talks will also remain in focus. Commerce and Industry Minister Piyush Goyal recently said discussions on an India-US trade deal are progressing, with the first phase possibly being concluded by November. Negotiations with the EU are also reported to be at an advanced stage.

FII activity will play a critical role in shaping market momentum. Last week, FIIs turned net buyers in two of five sessions, including inflows of ?129.58 crore on Friday, hinting at a gradual return of foreign capital.

Indian equities performed strongly last week: the Nifty rose 373 points (1.51%) to close at 25,114, while the Sensex advanced 1,193.94 points (1.48%) to settle at 81,904.70.

Experts remain upbeat on the near-term outlook, advising a focus on domestic cyclicals such as autos, metals, and consumer discretionary, while balancing positions with defensives like select FMCG and pharma stocks.

On the technical side, analysts at Religare Broking noted that Nifty tested resistance near its earlier swing high of 25,150. Ajit Mishra, Senior VP of Research, said, “While some consolidation cannot be ruled out, the broader outlook remains positive, with the next upside target in the 25,250–25,500 range. Immediate support lies at 24,800, with stronger support at the 100-DEMA around 24,650.”

For Bank Nifty, the index is facing resistance near 55,000, where the 100-DEMA also converges. “A breakout above this level could trigger short covering and open the way toward 56,200. On the downside, support lies in the 54,000–54,400 range, with major support at the 200-DEMA near 53,600,” Mishra added.

With inputs from IANS