Global Macro Signals (06 October 2025)
- GIFT Nifty weakens amid heavy foreign positioning: Futures are trading lower, reflecting the aggressive bearish stance by FPIs who have ramped up short positions, signaling lower room for upside.
- Fed’s tone keeps rate cut hopes in limbo: Even as inflation cools, central bankers remain cautious, hinting that further easing will depend on sustained soft data.
- Asia opens under pressure after weak global cues: Regional indices are downtrodden, tracking weakness from the U.S. and China, and traders are shying from fresh longs.
- U.S. futures slip on profit taking and uncertainty: After recent highs, futures dipped as market participants de-risked ahead of key data releases.
- 10-year U.S. yield steadies near 4.1 percent: Yields remain sticky, constraining interest in rate-sensitive names and flow into equities.
- Dollar index edges up on safe-haven demand: A firm greenback is creating headwinds for emerging markets, narrowing the margin for foreign inflows.
- Gold holds ground on policy and equity worries: With global ambiguity and central bank caution, bullion maintains support as a safe-haven asset.
- Brent crude gains on supply discipline and OPEC’s caution: Modest production hike expectations and tight supply cues help crude remain firm amid weak demand signals.
- Rupee may find modest support from IPO flows: With Tata Capital’s IPO expected to bring in significant foreign participation, the INR could see stabilization pressure.
- FII bearish bets to dominate; DII support limited: Foreign funds have markedly increased short positions in futures, while domestic flows are unlikely to fully offset downside pressure.
// Market Outlook & Trade Setup
The global macro posture continues to vacillate between easing hopes and policy caution, leaving markets in a fragile equilibrium. In India, that translates into a session likely to test downside unless strong flows or surprises interrupt the drift. The weak bias from GIFT Nifty at open suggests early weakness is probable, and unless fresh capital arrives, gains will be hard to sustain. On the technical front, Nifty faces resistance zones that must be breached cleanly; otherwise, support around its averages will be critical to avoid breakdown.
Implied volatility is elevated, indicating that traders are bracing for sharp intraday swings in either direction. On the liquidity front, FPIs are aggressively opting for short bets in derivatives, applying downward pressure. Meanwhile, DIIs and domestic institutional flows will have to work harder to stabilize the market. Overnight F&O contract flows will prove pivotal—if there is a buildup in longs, downside could be cushioned; but weak participation would leave the market vulnerable.
Implied cues for open, direction, and trend: Expect a soft open with downside bias unless global cues shift early. The session is likely to stay in a range with mild negative skew unless support levels hold firmly. For sustained trend reversal or recovery, decisive foreign buying or strong global impulse will be necessary.