Indian equity markets staged a strong rebound in early trade on Monday, October 5.
With the Sensex surging nearly 700 points and the Nifty moving back above 22,600. Buying was visible across banking, IT, financial services and consumer stocks, although auto and pharma shares remained weak.
At 9:49 am, the Sensex was up 683.29 points, or 0.95%, at 72,592.99. The Nifty gained 188.60 points, or 0.84%, to trade at 22,610.55.
IT Stocks Turn Higher
IT stocks emerged as one of the key drivers of the morning rebound. The Nifty IT index climbed 1.43%, with several heavyweight counters trading higher.
TCS advanced 2.32%, while Tech Mahindra gained 0.97%. Infosys edged up 0.13%, whereas HCLTech remained in the red, down 0.59%.
Investor focus on the sector has increased following the latest earnings and outlook commentary from global IT major Accenture, with markets assessing what it could mean for Indian technology companies.
PSU Banks Lead Banking Rally
Banking stocks continued to provide strong support to the broader market. The Nifty PSU Bank index jumped 1.98%, while the Nifty Bank gained 1.20%.
Among major lenders, Axis Bank rose 1.54%, SBI gained 1.21%, ICICI Bank advanced 0.95% and HDFC Bank climbed 0.89%.
The Nifty Financial Services index was also up 1.20%.
Bajaj Finance was the biggest gainer among Sensex stocks, rising 4.29%. Along with TCS, Axis Bank, Reliance Industries, Titan and ITC were among the major gainers.
Larsen & Toubro, Power Grid, SBI, IndiGo and Bharti Airtel also traded firmly higher.
BEL, Pharma and Auto Stocks Lag
The rally was not uniform across sectors. BEL fell 0.83%, while Sun Pharma declined 0.81%. Asian Paints slipped 0.60% and HCLTech was down 0.59%.
The Nifty Auto index dropped 0.37%, while the Nifty Pharma index fell 0.46%. The Nifty Healthcare index also declined 0.64%.
Broader Market Gains
Buying extended beyond the benchmark indices, with mid- and small-cap stocks also participating in the recovery.
The Nifty Midcap 100 gained 1%, while the Nifty Smallcap 100 advanced 0.89%. The Nifty 500 rose 0.82% and the Nifty 200 climbed 0.84%.
Meanwhile, India VIX eased 0.83% to 14.34, pointing to a moderation in near-term volatility.
RBI Policy in Focus
Markets are now looking ahead to the Reserve Bank of India’s October 7 monetary policy decision. Investors are particularly focused on expectations of a possible 25-basis-point repo rate hike, along with inflation, crude oil prices and global geopolitical developments.
Geojit Investments Chief Investment Strategist V K Vijayakumar said the market could be heading for a near-term rebound after eight consecutive weeks of declines.
He pointed to better-than-expected Accenture results and Anup Bagchi’s appointment as HDFC Bank’s MD and CEO as potential positive catalysts. At the same time, elevated crude prices, high US bond yields and continued foreign institutional investor selling remain key risks.
Vijayakumar said valuations have become more attractive, particularly among large-cap stocks, while strong September auto sales indicate continued resilience in the domestic economy.
He also expects the RBI to raise rates by 25 basis points on October 7, a move he said markets have largely priced in. According to him, banks could benefit from higher floating rates through improved margins.
Markets Rebound After Four-Day Losing Streak
Monday’s recovery follows a sharp sell-off in the previous session. The Sensex had fallen 570.59 points, or 0.79%, on Thursday to close at 71,909.70 after touching a fresh 52-week low of 71,292.88.
The Nifty had also declined 198.50 points, or 0.88%, to settle at 22,421.95.
Heavy FII selling, elevated US bond yields and rising crude prices had weighed on sentiment, leaving both benchmark indices with four consecutive sessions of losses.
The early Monday rebound therefore marks a sharp change in sentiment, although investors remain cautious ahead of the RBI policy decision and amid persistent global and domestic headwinds.
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