Benchmark indices Sensex and Nifty rebounded in early trade on Monday (October 27, 2025), mirroring a sharp rally in global markets, as softer-than-expected U.S. inflation report has reignited hopes of Fed rate cuts.

Prospects of a U.S.–China trade deal and fresh foreign fund inflows also added to the markets’ optimism.

The 30-share BSE Sensex climbed 272.7 points to 84,484.58 in early trade. The 50-share NSE Nifty went up by 88.55 points to 25,883.70.

From the Sensex firms, Tata Steel, Bharti Airtel, Reliance Industries, State Bank of India, HDFC Bank and NTPC were among the major gainers.

However, Infosys, Bharat Electronics, Kotak Mahindra Bank and Bajaj Finance were among the laggards.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng traded sharply higher.

U.S. markets ended in positive territory on Friday (October 24, 2025).

“The global market construct is bullish. With Dow Jones, Nikkei and Kospi at record highs, the sentiments are positive. Globally, there are signals of declining trade tensions,” V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Foreign Institutional Investors (FIIs) bought equities worth ₹621.51 crore on Friday (October 24, 2025), according to exchange data.

“A softer-than-expected US inflation report has boosted hopes of Fed rate cuts. Adding to the optimism are prospects of a US–China trade deal and possible US tariff cuts on Indian imports to 15–16%,” Prashanth Tapse, Senior VP (Research), Mehta Ltd, said.

Global oil benchmark Brent crude climbed 0.23% to $66.09 a barrel.

On Friday (October 24, 2025), the Sensex dropped by 344.52 points or 0.41% to settle at 84,211.88. The Nifty declined by 96.25 points or 0.37% to 25,795.15.

Foreign investors have pulled out ₹7,945 crore from Indian equities so far in September, weighed down by global uncertainties such as tariffs and persistent geopolitical tensions.

This follows heavy outflows of ₹34,990 crore in August and ₹17,700 crore in July, taking the total equity sell-off by Foreign Portfolio Investors (FPIs) in 2025 to ₹1.38 lakh crore, according to depository data.

Looking ahead, market experts believe that upcoming macroeconomic data from India and the U.S., along with progress in tariff negotiations, will be key drivers of FPI flows in the coming week.

Although FPIs remain net sellers in September, with cumulative equity outflows of ₹7,945 crore till September 19, their selling has moderated. In fact, during the latest week, they briefly turned net buyers, purchasing ₹900 crore of equities after the U.S. Federal Reserve cut interest rates by 25 basis points.

“For the current week FPIs bought Indian equities worth ₹900 crore on the back of the Fed’s rate cut. With two more cuts projected in 2025, liquidity in global markets could improve significantly. However, FPIs remain net sellers in September,” said Vaqarjaved Khan, Senior Fundamental Analyst, Angel One Ltd.

Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, noted that foreign investors made a “modest but noticeable return” to Indian equities during the week.

He said the Fed’s dovish stance, coupled with easing U.S.-India trade frictions and India’s stable macroeconomic outlook, lifted sentiment. However, he cautioned that lingering global uncertainties and geopolitical risks continue to keep flows cautious.

Echoing this view, V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services, pointed out that FII selling in India has coincided with buying in other Asian markets such as Hong Kong, Taiwan, and South Korea – a strategy that has been profitable so far this year. “This scenario may change going forward,” he added.

On the other hand, debt markets witnessed investment, FPIs invested about ₹900 crore under the general limit and ₹1,100 crore through the voluntary retention route.