Key Context & Market Status

Holiday Notice: Equity markets (NSE, BSE) are shut today for Gandhi Jayanti & Dussehra.

With markets closed, today’s session is a “rest day” — but macro, global, and regulatory moves could shape momentum when trading resumes.

FIIs on Oct 1 logged net outflows of ~₹1,605 Cr while DIIs bought ~₹2,916 Cr.

Key reforms from RBI (announced yesterday) are likely to drive sentiment across sectors.

Macro & Policy / Regulatory Highlights-2 Oct 2025

RBI Reforms:

Maintained key rates but launched expansive changes, including allowing credit for mergers & acquisitions, and raising the cap for loans against shares & listed debt securities.

These steps are aimed at reviving corporate credit, boosting capital markets activity, and giving banks fresh lending leeway.

SEBI / Algo Trading:

India extended the timeline for rolling out new rules on algorithmic trading for retail investors. Brokers must register at least one algo strategy by Oct 31, 2025, and complete full API registration by Nov 30.

Cross-Border Rupee Use:

RBI also signaled steps toward promoting the rupee in cross-border trade and financing to reduce dollar dependency.

IPO Pipeline:

The IPO calendar is heating up: India is expecting an $8 billion IPO rush in Q4 2025, led by marquee issues such as Tata Capital, LG India, and WeWork India.

Sector-wise Watch (What will unfold when markets reopen)
1. Banks / Financials & NBFCs

Banks stand to benefit from the RBI’s liberalization of corporate credit and share-lending rules.

NBFCs / fintech names will be monitored for shifts in lending behaviour and capital access.

2. Capital Markets / Broking / Retail investing

Algo trading regulation changes could reshape order flow dynamics, especially for retail.

Increased retail participation and barrier removals for foreign investors may tilt flows toward mid/small-cap names.

3. Real Estate / Infrastructure / EPC

The expressway and infrastructure announcements (recent order wins) get reinforcement from better credit availability.

Developers may see renewed interest if credit constraints ease.

4. Automobiles / Mobility

Tata Motors’ foreign‐venture moves (Netherlands arm for CV business) will be focal when markets reopen.

EV / mobility plays will be sensitive to policy support, credit availability, and global demand.

5. Pharma / Healthcare

With tariff reprieves for pharma imports but looming 100% tariffs from Oct 1 in the US, regulatory risk is high.

Firms with strong US/EU pipelines or local manufacturing will be favoured.

6. Metals, Mining & Commodities

These remain sensitive to China demand, currency movement, and global supply factors.

Any improvement in credit and domestic demand could catalyze renewed interest.

7. IT / Technology / Digital

Impact from US visa/trade policy and global tech demand will remain overhangs.

Names with strong digital, cloud, AI exposure and offshore strength will be relatively safer.

8. Energy & Renewables

Renewables players will benefit from acceleration in project financing if RBI reforms trickle into green credit.

Conventional oil & gas names sensitive to global price moves and policy direction.

Sentiment & Flow Outlook

The “pause day” gives markets a breather, but all eyes are on how markets reopen — given the heavy short positions and repositioning seen.

The RBI’s reform announcement acts like a catalyst, possibly helping short-covering and triggering momentum flows.

Sector rotation likely: positive tilt toward financials, infrastructure, and capital markets; cautious stance on policy-sensitive sectors and global play names.

Volatility and gap risk will be high on Friday as pent-up orders execute and new positioning unfolds.