India’s stock market closed September with a modest gain, ending an eight-session losing streak that marked the sharpest route for equities since March. While the Sensex and Nifty 50 secured a slim 0.5% monthly rise, this was their weakest September result since 2014, impacted by global volatility, new tariffs, and heavy selling by foreign investors.
Biggest Factors Shaping the Market
Foreign Investors Turn Bearish
Foreign portfolio investors pulled out more than ₹22,000 crore from Indian stocks just in the last six market days of the month. Since the beginning of 2025, net outflows have crossed ₹1.38 lakh crore. This streak was fuelled by worries about US-India trade tensions, persistent US tariffs, and global uncertainties. Brief buying after the US Fed rate cut was quickly reversed as fresh policy announcements reignited risk aversion.
US Tariffs and Visa Policy Hit Sentiment
President Donald Trump’s decision to impose 50% tariffs on Indian exports and hike H-1B visa fees stoked new worries for investors. Major sectors—IT, pharma, textiles, and chemicals—are all facing pressure, with some firms warning about possible revenue declines if trade tensions aren’t resolved soon. India’s exports to the US have fallen for three straight months, and steep tariffs are expected to cause further declines in gems, jewelry, and solar panels. Experts say the recent moves by the White House could impact India’s macro stability and earnings across technology and export-focused industries.
Market Outlook for October
Historically, October has been a stronger month for Indian stocks. In seven out of the last ten years, Nifty and Sensex have closed higher. Analysts remain cautiously optimistic, highlighting domestic institutional support and festive GST rate cuts for auto and consumer durable sales. However, the key drivers for this month will be the RBI’s monetary policy meeting, the start of the Q2 earnings season, and any positive news on US-India trade deals. Technology giants like TCS, Infosys, and HCL Technologies will set the tone with their results and outlooks.
What Should Investors Watch?
- RBI’s policy stance and inflation commentary
- Q2 earnings of large caps, especially tech majors
- US-India trade negotiations and tariff developments
- Domestic FPI flows and possible reversal of foreign sentiment
Vinod Nair from Geojit Investments said the near-term market is likely to stay range-bound, with big moves dependent on headline policy and earnings triggers. Investors are best advised to track updates closely and avoid knee-jerk reactions to global news or policy shocks.
Disclaimer: Currently, markets are volatile. All views are for informational purposes only. Please consult a registered expert before making investment-related decisions.
