Week ahead: TCS earning, US shutdown, Tata Capital and LG Electronics IPO among key market triggers to watch out

Indian markets rebounded last week, closing in positive territory. The key driver was the RBI’s policy announcement. The Monetary Policy Committee (MPC) held the repo rate steady at 5.5% for the second consecutive meeting, raised the FY26 GDP growth forecast to 6.8%, and trimmed its inflation outlook. Adding to the optimism, GST collections rose 9.1% year-on-year in September to ₹1.89 lakh crore, signaling strong consumption momentum. The NIFTY50 index ended the week nearly 1% higher, marking a confident reversal, with all sectors finishing in the green.

Meanwhile, the broader market mirrored this optimism as the NIFTY Midcap 150 Index and the Smallcap 250 Index both climbed 2%. On the sectoral front, all the major sectoral indices ended the week in the green. NIFTY PSU Banks (+4.4%) and NIFTY Metals (+4.0%) led the rebound. Private Bank, Defence and Oil & Gas also posted notable gains. Even defensive sectors such as fast-moving consumer goods (FMCG) participated in the rally.

Market breadth

This week's data shows that around 50% of NIFTY50 constituents are trading above their 50-day moving average. This signals an improvement in market breadth, following last week's rebound. Following a period of sharp pullback, the steady rise in stocks above key technical levels will further highlight strengthening momentum and a shift towards risk-on sentiment among investors.

FIIs positioning in the index

Foreign Institutional Investors (FIIs) began the October series by entering into a record number of short contracts in index futures. The long-to-short ratio of FIIs is 7:93, indicating a strongly bearish stance on Indian equities via derivatives.

However, it is important to note that this extreme build-up of short contracts has been the prevailing trend for the past three months. Despite this bearish positioning, historical data suggests that such elevated short interest often precedes sharp short-covering rallies, particularly when underlying market sentiment changes or remains strong.

FIIs remained net sellers in the cash market during September, offloading shares worth ₹35,300 crore, a sign of cautious sentiment. In contrast, Domestic Investors continued to buy, with net purchases totaling ₹65,300 crore.

NIFTY50 index

The NIFTY50 index rebounded from the crucial support zone of 21-weekly exponential moving average. It protected the previous week’s low on a closing basis, indicating support based buying from lower levels. However, the short-term structure of the NIFTY50 index still remains in the consolidation zone with immediate resistance around 25,100. Unless index reclaims this zone on a closing basis, the trend may remain range-bound. Meanwhile, the immediate support for the index is around 24,500.

On the other hand, LG Electronics India, a leading manufacturer of consumer electronics and home appliances, is scheduled to open its IPO on 7 October. The subscription window will close on 9 October. The price band has been set at between ₹1,080 and ₹1,140 per share, while IPO lot size is 13 shares, with finalisation of allotment expected by 10 October.

Investors will be closely watching the release of the Federal Open Market Committee (FOMC) minutes from its mid-September meeting on 8 October. Additionally, Friday's release of the University of Michigan's Consumer Sentiment Survey will provide an important gauge of consumer confidence amid ongoing tariff uncertainties.

Market participants should also be aware of two potential market disruptors. First, the U.S. government entered a shutdown on 1 October, impacting around 8,00,000 federal employees. Consequently, the release of key economic data, including the highly anticipated September non-farm payroll report, has been delayed. This delay is significant because non-farm payroll data provide crucial insight into the health of the U.S. labour market and influence Federal Reserve policy decisions.

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