Indian equity markets extended their winning streak for the third consecutive week, supported by sustained foreign institutional investor (FII) inflows, easing crude oil prices, appreciation in the Indian rupee and improving optimism following festive demand. However, the broader market outperformed the benchmark indices, indicating continued investor interest in mid-cap and small-cap stocks. For the week ended, the BSE Sensex gained 564.43 points (0.70%) to close at 81,592.45, while the Nifty 50 advanced 113.95 points (0.46%) to settle at 25,144.30. The BSE Mid-Cap index outperformed with a 2.17% gain, while the BSE Small-Cap index surged 3.04%. Markets witnessed positive momentum during the first four trading sessions, supported by softer crude prices and hopes of de-escalation in the US–Iran conflict. However, profit booking and weakness in the rupee triggered a correction on Friday. Domestic sentiment remains constructive, although concerns over rising retail inflation, elevated US bond yields and geopolitical uncertainty could restrict further upside. With the Q2FY27 earnings season largely behind us, market direction is likely to depend increasingly on macroeconomic developments, global central bank commentary, institutional flows and currency movements.
Global equity markets delivered a mixed performance during the week, with regional divergence reflecting differences in economic data, inflation expectations and technology-sector developments. US markets recovered on a weekly basis, despite volatility towards the end of the week. The Dow Jones gained 2.1%, the S&P 500 advanced 2.5%, and the Nasdaq Composite rose 2.3%, marking their strongest weekly performance since early August. However, technology stocks remained under pressure following the unexpected resignation of NVIDIA CEO Jensen Huang, raising concerns about leadership continuity and the broader artificial intelligence investment outlook. In Asia, Japan's Nikkei emerged as a strong performer, gaining approximately 6.5% during the week, supported by robust machinery orders and improving economic sentiment. Conversely, Hong Kong's Hang Seng declined 3.45%, while China's Shanghai Composite remained under pressure amid mixed inflation indicators. China's producer price inflation accelerated to 5.7% in October, while consumer inflation moderated to 0.7%. In the US, October consumer inflation increased 0.4% month-on-month, while unemployment declined to 4.1%, indicating continued labour market resilience. However, rising inflation and Treasury yields, with the 10-year yield moving above 5.1%, have strengthened expectations of further Federal Reserve tightening. Going forward, global markets are likely to remain sensitive to inflation data, central bank commentary, technology-sector developments and geopolitical developments.
The US–Iran conflict remains an important source of uncertainty for global financial markets, particularly because of its implications for energy supplies and shipping routes across the Middle East. Although earlier expectations of diplomatic progress and a possible de-escalation had supported a correction in crude oil prices, negotiations remain challenging. US President Donald Trump indicated that Washington did not necessarily require an agreement with Iran to end the conflict, while Iran continued to resist key US demands, including restrictions relating to its nuclear programme and the ongoing blockade and sanctions. Meanwhile, regional tensions escalated following reported Houthi attacks on Saudi Arabian energy infrastructure and incidents involving oil tankers in the Strait of Hormuz. These developments have renewed concerns about the security of critical energy infrastructure and crude transportation routes. The Strait of Hormuz remains strategically important for global oil supplies, and any prolonged disruption could trigger a sharp increase in energy prices. Although the market is increasingly factoring in the possibility of a global supply surplus, geopolitical risks remain elevated. For India, prolonged instability could increase the import bill, weaken the rupee, intensify inflationary pressures and adversely affect corporate margins, particularly across aviation, paints, chemicals, logistics and other energy-intensive industries.
International crude oil prices remained volatile but recorded their second consecutive weekly decline, with Brent crude settling at approximately US$95.84 per barrel and US WTI at US$88.56 per barrel, both declining around 2.5% during the week. The correction reflects expectations of a growing global supply surplus, recovering Middle Eastern exports and relatively subdued US fuel demand. Rising US crude and refined product inventories have also weighed on prices. However, geopolitical uncertainty remains a significant upside risk, particularly following reported attacks on Saudi energy infrastructure and tanker-related incidents around the Strait of Hormuz. Going forward, crude prices are likely to remain sensitive to diplomatic developments, global inventory trends and OPEC+ supply decisions.
The domestic economic outlook remains relatively resilient, supported by consumption demand, government capital expenditure and improving private investment activity. Moody's Ratings has revised India's FY27 GDP growth forecast upwards to 7% from 6.5%, highlighting the strength of domestic consumption, improving investment activity and the economy's ability to absorb energy-related external shocks. Strong capital goods production, rising industrial credit and higher capacity utilisation indicate improving prospects for private-sector capital expenditure. However, inflation has emerged as a significant macroeconomic concern. India's Consumer Price Index (CPI)-based retail inflation increased to 6.09% in October 2026 from 5.54% in September, breaching the Reserve Bank of India's upper tolerance limit of 6% for the first time in two years. Food inflation accelerated to 8.94% from 7.74%, primarily driven by higher prices of essential commodities, including onions, garlic and ginger. Persistent food inflation could affect household purchasing power and discretionary consumption while complicating the RBI's monetary policy outlook. On the manufacturing front, the government's Production Linked Incentive (PLI) schemes continue to support domestic capacity creation, technology adoption, employment generation and export competitiveness. NITI Aayog's assessment highlighted encouraging progress across pharmaceuticals, electronics, food processing, telecommunications, automobiles, white goods and drones. Additionally, the government has extended the PLI scheme for domestic medical device manufacturing up to FY36, with an available outlay of approximately Rs. 2,700 crore. The government has also approved a Nutrient Based Subsidy budgetary requirement of approximately Rs. 62,370 crore for the Rabi 2026-27 season, supporting fertiliser affordability. Overall, India's medium-term growth outlook remains constructive, although elevated inflation, currency depreciation, higher crude prices and tighter global financial conditions remain important risks to monitor.
Indian equity markets are expected to remain sensitive to domestic macroeconomic indicators, global inflation trends, central bank commentary, currency movements and geopolitical developments during the coming week. With the Q2FY27 earnings season largely concluded, investors' attention will increasingly shift towards economic data and institutional fund flows. Domestically, October Wholesale Price Index (WPI) inflation and merchandise trade figures, will provide insights into manufacturing cost pressures and external trade conditions. Money supply data and October industrial production figures will be important indicators of liquidity and industrial activity. Globally, US retail sales, eurozone inflation, Federal Open Market Committee (FOMC) meeting minutes, US initial jobless claims and manufacturing indicators will remain important triggers for market direction. Investors will also closely monitor crude oil prices, developments in the US–Iran conflict, the Indian rupee and US Treasury yields. From a technical perspective, the Nifty 50 has immediate support in the 24,500–24,300 range, while the major resistance zone is placed between 25,800 and 26,000. Sustained buying interest and a decisive move above intermediate resistance levels could improve the prospects of a recovery towards 25,800–26,000. Conversely, a breach of the 24,300-support zone could increase selling pressure and trigger further profit booking. Overall, the near-term outlook remains cautiously positive, but volatility is likely to persist, with global developments and inflation trends determining the next directional move. Investors should focus on companies with strong earnings visibility, healthy balance sheets, sustainable cash flows and reasonable valuations rather than chasing sharp rallies in the broader market.