Indian stock markets rallied sharply on Thursday, October 29, with the benchmark Sensex jumping more than 900 points and the Nifty gaining over one per cent, as heavy buying in banking, fast-moving consumer goods and information technology shares combined with a pause in United States interest rate hikes and a marginal easing in crude oil prices to lift investor sentiment after a period of consolidation.
The 30-share BSE Sensex jumped 905.01 points, or 1.24 per cent, to close at a more-than-a-week-high of 74,151.04. The 50-share NSE Nifty settled 237.90 points, or 1.05 per cent, higher at 22,936.75. The gains came on the monthly derivatives expiry day, a session that often sees heightened volatility, but on Thursday the direction was firmly upward from the afternoon onwards as buying picked up across sectors.
Among the Sensex constituents, Adani Ports emerged as the biggest gainer, rising more than five per cent after the company reported an 18 per cent increase in consolidated net profit to Rs 3,682.44 crore for the September quarter, driven by higher revenue. The strong earnings report gave the stock a clear lead over the rest of the pack and set the tone for a session in which corporate results, rather than global headlines, did much of the heavy lifting.
Other gainers included Adani Enterprises, which rose around five per cent, and Kotak Bank, which gained about four per cent, according to market updates through the day.
Five key factors came together to drive the rally. The first was the United States Federal Reserve's decision to keep its benchmark interest rate unchanged at 3.75 to 4 per cent, easing concerns about an immediate increase in borrowing costs and giving global markets a breather amid persistent inflation worries.
The Fed's pause was read positively by rate-sensitive sectors in India, with strength in FMCG, banking and financial services, and realty names contributing meaningfully to the day's gains.
The second factor was a marginal easing in crude oil prices. Brent crude, the global oil benchmark, fell 1.18 per cent to 113.96 dollars per barrel. Although prices remained elevated above 110 dollars a barrel, the modest decline offered some relief to oil-importing India, where high crude prices raise import costs, put pressure on the rupee and feed into inflation.
A firmer rupee on the day added to the positive mood, since a stronger currency can help ease the cost of imports, particularly crude oil, on which India relies heavily.
The third factor was strong corporate earnings. Positive results helped support buying in select stocks, particularly in realty, FMCG and banking, and gave investors confidence that domestic demand remains resilient even as input costs stay high.
The fourth factor was institutional buying: foreign institutional investors bought equities worth Rs 871.83 crore on Wednesday, October 28, while domestic institutional investors were also net buyers of shares worth Rs 643.35 crore, according to exchange data. The combination of foreign and domestic buying improved the liquidity backdrop for the market.
The fifth factor was the breadth of the rally itself. Buying was not confined to the headline indices. Realty, FMCG and select banking stocks led the advance, but mid-cap and small-cap stocks also recorded solid gains, with the Nifty Smallcap 100 and Nifty Midcap 100 rising around one per cent each. The sharp gains added nearly Rs 5 lakh crore to the total market capitalisation of all companies listed on the BSE, pulling it up to more than Rs 477 lakh crore.
Market experts said the session reflected improved risk appetite. Vinod Nair, Head of Research at Geojit Investments, said Indian equities rallied as the US Fed's rate pause, marginal easing in crude and renewed institutional buying improved risk appetite despite a challenging external backdrop.
He noted that FMCG led gains on resilient consumer demand, while financials, IT, realty and power strengthened, with mid- and small-caps also participating, signalling healthier market breadth. He added that the broader thesis remains supported by selective earnings resilience and domestic demand stability, although elevated input costs could test margin durability.
Ajit Mishra, senior vice-president of research at Religare Broking, said the recovery reflected improved risk appetite and renewed buying interest. After opening on a flat note, the Nifty crossed its key 20-day exponential moving average level of around 22,825 during the session and gradually moved higher to settle at 22,936.75, he noted.
The Sensex advanced over 900 points to close at 74,151 on the expiry day, reflecting improved risk appetite and renewed buying interest, Mishra said, while cautioning that elevated crude oil prices and global uncertainty could limit the recovery.
The risks hanging over the market have not gone away. Elevated Brent crude, rupee weakness, rising domestic bond yields and prevailing geopolitical uncertainty remain key concerns for analysts, and market participants largely looked past elevated crude prices on Thursday even though they continue to hover above 110 dollars a barrel and remain a key macro risk for import-dependent economies such as India.
European markets were trading higher in mid-session deals on Thursday, and US equity markets had ended higher in overnight deals on Wednesday, providing a supportive global backdrop.
Near-term momentum, analysts said, will hinge on domestic earnings breadth, continuity of foreign flows and moderation in energy prices, while global inflation trends and policy signals from other major central banks could keep yields and capital flows volatile.
For retail investors, the message from Thursday's session was more straightforward: after a period of consolidation, the market found buyers across sectors, led by the domestic consumption and financial themes that have anchored the Indian story through a difficult global year.
Thursday's rally also mattered for what it said about the structure of the recovery. A rally led only by a handful of heavyweight stocks can quickly run out of steam, but Thursday's advance was broad, with FMCG, banking, IT, realty and power all participating and smaller companies joining in. That breadth, combined with the return of foreign buyers alongside sustained domestic institutional support, gave the session a healthier character than a narrow, index-driven bounce.
Whether the momentum holds will depend on the same variables that drove it: the path of crude oil, the direction of the rupee, the next signals from the Federal Reserve, and the earnings reports still to come in the September quarter season. For now, though, the market has something it lacked for much of the recent consolidation: a clear, broad-based up day, built on earnings, liquidity and a calmer global rate outlook.
(Reporting based on The Hindu and The Times of India.)