MUMBAI: Indian equities are set to take cues this week from the US Federal Reserve’s upcoming interest rate decision and progress on the India-US trade agreement.
The market ended the Diwali-shortened week with modest gains, marking its fourth consecutive weekly advance. Meanwhile, gold prices snapped an eight-week rally to record their first weekly decline.
Dalal Street sentiment remained upbeat during the initial sessions of the past week, but profit-booking toward the end trimmed gains. The benchmark NSE Nifty rose just 0.33% to settle at 25,795.15, while the BSE Sensex advanced 0.31% to close at 84,211.88.
“Markets are likely to begin the final week of October with a cautiously optimistic tone. Strong corporate earnings, steady foreign inflows, and improving global sentiment offer a constructive backdrop, though geopolitical uncertainties, scheduled monthly expiry and the upcoming U.S. Fed policy decision could trigger short-term volatility,” said Ajit Mishra, SVP, Research, Religare Broking.
Mishra added that the focus will shift to the US Federal Reserve’s policy decision on October 29, which could influence global liquidity trends and risk sentiment.
Additionally, market participants will closely monitor developments surrounding the scheduled US-China presidential meeting, which could further ease trade tensions and impact global markets.
Market analysts expect the Federal Reserve to reduce interest rates for a second time this year. The federal fund rate is expected to come down by a quarter percentage point to a range of 3.75% to 4%.
Vinod Nair, Head of Research, Geojit Investments, said that investors remain watchful of developments in the India-US trade negotiations, as both sides edge closer to finalising a deal. “Global market sentiment will largely hinge on key interest rate decisions from the FED & ECB by next week, which are expected to influence market direction in the near term,” added Nair.
Gold prices came down about 3% last week, the precious metal’s steepest fall since mid-May as traders booked profits after a prolonged rally that drove prices to record highs earlier this month.
The dollar index gained for a third consecutive session, making gold more expensive for non-US buyers and dampening sentiment.
Ross Maxwell, Global Strategy Lead at VT Markets, said that gold prices eased last week after hitting record highs, as investors booked profits and awaited key U.S. inflation data that could shape the Federal Reserve’s next policy move.
In September 2025, consumer prices in the US went up 3% from a year earlier, slightly below forecasts of 3.1% Maxwell stated that a softer-than-expected inflation could reinforce bets on rate cuts, potentially reigniting gold’s upward momentum.
“However, a firmer dollar or a rise in real yields could trigger a 5–10% short-term correction, especially as gold trades within the key $4,000–$4,400 per ounce psychological zone,” said Maxwell.
The metal has still gained over 50% so far this year, driven by a weaker U.S. dollar, strong central bank buying, expectations of lower interest rates, and persistent geopolitical tensions.
The upcoming week will also see several major companies scheduled to release their financials. Investors will first react to Kotak Mahindra Bank’s results, followed by updates from IOC, TVS Motor Company, Larsen & Toubro, Hindustan Petroleum, ITC, Cipla, Dabur India, Maruti Suzuki India, Bharat Electronics, and ACC.
"These results will provide a clearer picture of sectoral trends and corporate profitability ahead of the festive quarter," said Mishra of Religare.
