Market Update — 26 September 2025

Market snapshot

• Benchmarks: Indian indices extended weakness — Sensex slipped ~555 pts and Nifty closed ~24,890.

• Driver: Persistent FPI selling and U.S. policy headlines (H-1B visa fee hikes + tariff moves) weighed on sentiment.

• FX: Rupee remained under pressure around the high-88s to the dollar on the risk headlines.

Sector-wise Highlights

1) Information Technology

• Price action / sentiment: Continued pressure from visa-fee and trade headlines; selective strength remains where AI deal pipelines and product revenues are visible.

• Near term: Prefer large caps with diversified non-US revenues and strong offshoring capabilities.

• Investor note: Trim highly leveraged or pure-US revenue names; redeploy into names with healthy margins and AI exposure.

2) Financials & Banks

• Price action / sentiment: Mixed — private banks showed resilience in retail flows while some mid-caps were weak; PSUs continue to trade on recovery narratives.

• Drivers: FPI flows, Q2 previews and credit growth commentary.

• Investor note: Prefer high-quality private banks and top PSU banks with improving RoA/asset quality.

3) Auto & Auto Ancillaries
• Price action / sentiment: Auto OEMs battled profit-taking despite festive season anecdotal demand; parts suppliers remain earnings-sensitive.

• Investor note: Use weakness to buy quality OEMs with healthy order books; avoid highly cyclical ancillary names without margin visibility.

4) Consumer & Retail

• Price action / sentiment: Consumer staples/durables showed selective strength on earnings and GST optimism. HSBC upgrades on some staples underpin sentiment.

• Investor note: Favor large FMCG and branded discretionary names benefitting from GST cuts and festive demand.

5) Energy, Power & Renewables

• Price action / sentiment: Energy stocks outperformed on firmer crude; transmission contractors saw mixed moves (some large caps underperformed intraday).

• Investor note: Play quality developers with secured PPAs and contractors with sticky orderbooks.

6) Infrastructure, Construction & Realty

• Price action / sentiment: Select infra contractors gained on fresh awards; realty remains weak on near-term sentiment.

• Investor note: Prefer EPC names with strong balance sheets and visible execution runway.

7) Pharma & Healthcare

• Price action / sentiment: Stock-specific moves tied to approvals and licensing deals (HIV approvals, oncology licensing, etc.).

• Investor note: Favor companies with clean inspection histories and visible US/regulated market revenue.

8) Metals, Mining & Commodities

• Price action / sentiment: Volatility tied to global demand and tariff headlines; copper/commodity moves remain a lead indicator for related stocks.

• Investor note: Prioritise companies with cost advantage and captive logistics.

9) Shipping, Ports & Defence-Maritime

• Price action / sentiment: Continued interest after recent policy initiatives and MoUs; financing & execution remain watch points.

• Investor note: Focus on companies with secured orders and government backing.

Top corporate actions (high-impact / today)

• Contract wins, orderbook updates and a mix of M&A/licensing/board actions dominated corporate headlines — watch infra contractors, pharma approvals and software deal wins for Q2 guidance signals.

Regulatory & Policy Watch

• U.S. policy: H-1B fee & tariff headlines remain the single largest cross-border risk for IT, pharma and export-heavy sectors.

• Domestic: Keep an eye on SEBI’s regulatory moves (glitch rules and market-structure notifications) and RBI’s communications on liquidity — both can quickly change micro-flow dynamics.

Market flows & derivatives snapshot

• Flows: FPIs continue to be sellers in September; DIIs providing partial cushion.

• Options interest: Key strikes around 25,000–26,000 remain focal points for positioning (watch skew and PCR for day trades).

Investor Takeaways

1. Risk management: Maintain a 5–10% cash buffer to exploit volatility from headline events.

2. Rebalance: Reduce concentrated mid/small-cap exposure; shift into high-quality large caps in Financials, Consumer, Energy and selective Pharma.

3. Tactical buys: Infra contractors with secured orderbooks, renewable developers with PPAs, and select defence/maritime plays on policy momentum.

4. Hedge: Consider partial hedges on IT exposure via options or sector rotation if H-1B/tariff headlines persist.

5. Monitor: FPI flow reversal, RBI commentary, and any further US trade/visa actions — these will define the near-term market direction.

Investor summary

Markets slipped on 25 Sept 2025 as FPI selling and U.S. trade/visa headlines spurred broad risk-off; selective strength remained in energy, infra and defensive consumer names — favour quality, earnings visibility and balance-sheet strength.