IGI Logo

Below the Weekly market outlook 25th September 2026 from Vinod Nair, Head of Research at Geojit Investments Limited

"Against a geopolitically charged backdrop, investors closely tracked proceedings at the UN General Assembly for signals on the US–Iran conflict and the prospects for renewed diplomatic engagement, while also monitoring developments in U.S.–China discussions. Although crude oil prices ended the week lower, heightened volatility kept inflation concerns elevated, weighing on overall market sentiment. Offsetting this, India's flash PMI estimates for September came in stronger than expected, pointing to resilient activity across manufacturing and services. While this reassurance on the growth-inflation mix lent support to the market, rising US yields pressured emerging-market flows, leaving external forces to override the domestic macro comfort.

Persistent foreign selling consequently dragged domestic benchmarks lower, with midcaps underperforming large caps amid broader risk reduction. Sectorally, realty and consumer durables drew buying interest ahead of festive-season demand, while pharma found support in its defensive earnings profile. Among the laggards, financial services underperformed following regulatory changes to insurance commissions, while IT remained under pressure as tighter global financial conditions heightened concerns around discretionary technology spending across key client markets.

Looking ahead, domestic IIP data will test the durability of industrial activity, while US job openings, GDP, the core PCE deflator and PMI readings, alongside commentary from Federal Reserve officials, will frame expectations on the rate path and global liquidity. With crude hostage to geopolitics and yields elevated, valuation expansion looks constrained, leaving earnings delivery as the principal driver of returns. The strength in domestic activity signalled by the PMI, alongside steady domestic liquidity, should limit the downside, though investors would be prudent to stay selective and favour earnings visibility and valuation comfort."

Above views are of the author and not of the website kindly read disclaimer