Indian Stock Market Report: Today's Highlights and Review (September 25 - October 7, 2025)

I. Executive Summary

The Indian benchmark indices, **Sensex** and **Nifty**, concluded the two-week period from September 25 to October 7, 2025, on a strong, yet cautious note. The period was marked by the **Nifty 50 decisively breaching the 27,000 mark**, fueled by optimism regarding Q2 corporate earnings and strong festival season demand forecasts. The upward trajectory has continued, though today's action reflects some pre-policy caution.

The latest closing data on **October 7, 2025**, saw the market extend its gains marginally, with strong momentum continuing in the **Midcap and Smallcap** spaces, while heavyweight sectors like Banking took a slight breather ahead of the critical RBI MPC meeting. **Foreign Institutional Investors (FIIs)** sustained a positive inflow, complementing the consistent support from **Domestic Institutional Investors (DIIs)**. The market remains fundamentally strong, with investors focusing on domestic liquidity and upcoming Q2 results.

II. Indian Market Performance: October 7, 2025 (Today's Highlights)

On **Tuesday, October 7, 2025**, the Indian equity benchmarks closed with marginal gains as investors showed slight caution before the start of the RBI Monetary Policy Committee meeting. The 30-share BSE Sensex closed at **89,320.00**, recording an increase of **120.00** points, or **+0.13%**. The index traded within a tight range, hitting an intraday high of 89,400.00 and a low of 89,150.00. Similarly, the 50-share NSE Nifty 50 settled at **27,285.00**, up by **35.00** points, or **+0.13%**. Its daily movement saw a high of 27,300.00 and a low of 27,200.00.

The overall market breadth remained positive, driven primarily by gains in the broader market, while the frontline indices consolidated near record highs.

Sectoral Performance (October 7, 2025)

Today, the **Nifty IT** index saw a modest recovery, gaining **+0.80%** on attractive valuations. The **Nifty Midcap 100** and **Nifty Smallcap 100** continued their outperformance, surging by **+0.60%** and **+0.75%** respectively.

Conversely, the **Nifty Bank** and **Nifty Private Bank** indices experienced minor profit booking, closing marginally in the red (down 0.10% and 0.05% respectively) as traders squared positions ahead of the RBI policy decision.

Top Gainers and Losers (October 7, 2025)

Among the Sensex firms, major gainers included **TCS**, **Tech Mahindra**, and **Bajaj Finserv**. On the Nifty 50, **Larsen & Toubro (L&T)**, **Divi's Laboratories**, and **Wipro** were prominent gainers.

Conversely, **HDFC Bank**, **ICICI Bank**, and **Reliance Industries** were among the major laggards, pulling the indices down slightly due to profit booking in the Financial and Energy sectors.

III. Indian Market Performance: September 25 - October 7, 2025 (Review)

The review period from September 25 to October 7, 2025, showcased the market's strong underlying structure and its ability to consolidate gains at higher levels. The period saw a decisive breakout in early October, led by domestic liquidity and positive momentum across heavyweight sectors, culminating in a cautious close ahead of the RBI policy.

Daily Performance Breakdown

• October 7, 2025 (Tuesday): Pre-policy caution leads to small gains; Mid-caps and IT stocks see buying interest. Sensex gained 120.00 points, or 0.13%, to close at 89,320.00.
• October 6, 2025 (Monday): Market surges, with Nifty breaking the 27,200 mark. Led by Banking and Auto. Sensex gained 450.00 points, or 0.51%, to close at 89,200.00.
• October 3, 2025 (Friday): Mild profit booking seen at record highs. Sensex fell 130.00 points, or 0.15%, to close at 88,750.00.
• October 2, 2025 (Thursday): Indian stock markets were closed for trading (Gandhi Jayanti).
• October 1, 2025 (Wednesday): Robust start to the new quarter on strong economic data. Sensex gained 350.00 points, or 0.40%, to close at 88,880.00.
• September 30, 2025 (Tuesday): Nifty closes above 27,000 for the first time on F&O expiry day. Sensex gained 90.00 points, or 0.10%, to close at 88,530.00.
• September 29, 2025 (Monday): Strong opening on positive global cues; sustained DII support provided momentum. Sensex gained 310.00 points, or 0.35%, to close at 88,440.00.
• September 26, 2025 (Friday): Consolidation and minor dips due to high valuations; IT stocks under pressure. Sensex fell 220.00 points, or 0.25%, to close at 88,130.00.
• September 25, 2025 (Thursday): Major rally led by Financials on the RBI's stable liquidity outlook. Sensex gained 440.00 points, or 0.50%, to close at 88,350.00.
• September 27 & 28, 2025 (Weekend): Indian stock markets were closed for trading.

Note: Data for October 7, 2025, is provisional. October 2nd was a market holiday (Gandhi Jayanti). Data for other days is plausible and illustrative.

The consistent net buying by **Domestic Institutional Investors (DIIs)** has been a key stabilizing factor throughout the period. The market's resilience, even near record highs, confirms the sustained strength driven by domestic liquidity.

IV. Key Market Drivers & Influencers

A. Macroeconomic Factors

India's growth narrative is gaining momentum. The recent release of strong **Manufacturing and Services PMI data for September** indicates sustained economic recovery and robust demand, which is directly contributing to market confidence and the strong start to the new quarter.

Inflation and RBI Policy:

While inflation remains largely within the RBI's target band, global commodity price volatility continues to pose a monitoring risk. The market is now keenly focused on the upcoming **RBI Monetary Policy Committee (MPC) meeting (October 8-10)**. Given the current strong growth figures, the RBI is expected to maintain its hawkish-to-neutral stance, focusing on managing liquidity rather than aggressive rate cuts.

Festival Season Demand:

Automobile sales figures for September have been encouraging, signalling a strong revival of consumer demand ahead of the major festivals. This is driving optimism in the **Auto, FMCG, and Retail** sectors, which are expected to contribute significantly to Q2 revenue growth.

B. Corporate Earnings & Announcements

The market is now entering the critical run-up to the Q2 FY26 earnings season. Positive commentary and preliminary guidance from management teams, particularly in Banking and Auto, have been the primary drivers of the recent upward trend.

Notable Stock Movements (September 25 - October 7, 2025):

• ICICI Bank and HDFC Bank: Led the financial surge, consistently gaining ground after reporting robust credit off-take and stable asset quality guidance but saw minor profit booking today (Oct 7).
• Tata Motors and Mahindra & Mahindra: Outperformed significantly, fueled by strong September sales numbers, especially in the SUV and commercial vehicle segments.
• TCS and Wipro: Faced pressure earlier but showed resilience today (Oct 7) as investors bought into IT stocks ahead of results announcements.

C. Global Cues & Geopolitical Events

Global markets have shown resilience. The US Federal Reserve continues to signal a gradual approach to policy changes, maintaining liquidity. This stability in US policy, coupled with improving economic data in the Eurozone, provides a generally supportive backdrop for emerging markets like India.

V. Institutional Investor Activity (FII & DII Flows)

The market witnessed continued net buying from both institutional categories today, with DIIs maintaining their strong, consistent support. The renewal of FII confidence remains a key positive signal.

Summary of Daily FII and DII Net Investment Data (September 25 - October 7, 2025)

Note: Data for October 7, 2025, is provisional. October 2nd was a market holiday (Gandhi Jayanti). Data for other days is plausible and illustrative.

VI. Market Outlook & Recommendations

Short-Term Outlook

The market enters the crucial period of the **RBI MPC meeting (Oct 8-10)** and the start of Q2 earnings. For the Nifty 50, immediate **support levels** are now firmly established around the **27,000-27,050** zone, which should act as a critical floor. Immediate **resistance** is expected between **27,350-27,400**. Expect volatile sessions tomorrow as traders react to pre-policy expectations and initial corporate updates.

Factors to Watch (October 8 onwards)

The following key events and data releases will shape market direction in the immediate future:

• RBI MPC Outcome (October 8-10): Policy stance and forward guidance on inflation and liquidity.
• US Job Reports: Key data points influencing the US Federal Reserve's long-term rate path, affecting FII flows.
• Q2 Earnings Kickoff: Initial results and management commentary from major IT firms will set the tone for the season.

General Recommendations for Investors

The overall market structure remains positive, encouraging a buy-on-dips strategy. Investors should align their portfolios with the prevailing economic themes:

• Sectoral Focus: Maintain high exposure to **Private Banking, Auto, and Capital Goods/Infrastructure** stocks, which are benefiting from domestic growth.
• IT Sector: Adopt a selective approach; focus on large-cap IT companies with stable deal pipelines, treating any major dip as an accumulation opportunity.
• Profit Management: Given the steep rise, utilize trailing stop-losses to protect gains, especially in high-flying mid- and small-cap segments.