Sensex, Nifty rebound sharply as IT stocks rally

The domestic equity benchmarks rebounded sharply on Tuesday, snapping the previous session's decline as strong buying in IT stocks lifted sentiment. Better-than-expected quarterly results from HCLTech and TCS supported the sector, while the Indian rupee strengthened following the Reserve Bank of India's recent foreign exchange measures. However, elevated crude oil prices and geopolitical uncertainty continued to weigh on the outlook.

The Nifty 50 settled above 22,700, while the Nifty IT index soared 5.2%, recording its strongest performance in more than 17 months. Broader market indices lagged the benchmarks.

Meanwhile, India's retail inflation accelerated to 5.54% in September from 4.83% in August, moving further above the RBI's 4% medium-term target while remaining within its 2%-6% tolerance band. Rising inflation and elevated energy prices remain key risks to the domestic economic outlook.

The S&P BSE Sensex jumped 1,109.10 points or 1.54% to 73,033.78. The Nifty 50 index climbed 358.60 points or 1.60% to 22,721.95.

In the broader market, the Nifty Midcap 150 Index rose 0.95% and the Nifty Smallcap Index 250 increased 0.35%.

The market breadth was strong. On the BSE, 2,518 shares rose and 1,834 shares fell. A total of 251 shares were unchanged.

Economy:

The International Monetary Fund (IMF) has raised India's GDP growth forecast to 7% for both FY27 and FY28, from its earlier estimates of 6.4% and 6.7%, respectively. The upward revisions reflect stronger-than-expected economic momentum, supported by resilient domestic demand and robust services activity.

The IMF has raised its global growth forecast for 2026 to 3.1% from 3% projected in July, while retaining its 2027 forecast at 3.4%. Global inflation is projected at 4.7% in 2026, while the forecast for 2027 has been raised to 4.1% from 3.9% in July.

The IMF said India's growth outlook was supported by favourable demographic dynamics, a large and expanding domestic market, and continued structural reforms. The upward revision comes despite higher global oil prices and ongoing geopolitical uncertainties, with India remaining among the fastest-growing major economies.

Numbers to Track:

In the commodities market, Brent crude for the December 2026 settlement tumbled $2.16 or 2.03% to $104.49 a barrel.

The yield on India's 10-year benchmark federal paper declined 0.46% to 7.348 compared with the previous session close of 7.382.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 95.3800 compared with its close of 96.7850 during the previous trading session.

MCX Gold futures for the 4 December 2026 settlement fell 0.06% to Rs 1,49,450.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.24% to 102.34.

The United States 10-year bond yield fell 0.90% to 5.197.

Global Markets:

Dow Jones futures were up 155 points on Tuesday, indicating a positive opening for US stocks, as investors assessed the technology-led selloff, upcoming inflation data and the start of the third-quarter earnings season.

European shares advanced on Tuesday, showing resilience despite the global technology selloff. European equities have less exposure to large, pure-play AI technology companies than the Nasdaq and Asian semiconductor markets, leaving them less vulnerable to concerns over elevated AI valuations and intensifying competition in the chip industry.

Asian markets ended mixed, with South Korean technology stocks extending losses amid concerns over intensifying Chinese competition in the semiconductor industry. Samsung Electronics and SK Hynix came under pressure after reports that China?s ChangXin Memory Technologies (CXMT) was advancing its higher-density DRAM technology, raising concerns about competition in the global memory-chip market.

Chinese automakers also faced pressure after September retail sales weakened, while investors assessed elevated crude oil prices, geopolitical tensions and the outlook for global economic growth. South Korean equities faced additional concerns over the possibility of higher interest rates to narrow the gap with US rates, amid persistent household debt and default risks.

Wall Street ended mixed on Monday as investors awaited corporate earnings and key US economic data. The Dow Jones Industrial Average gained 195.60 points, or 0.38%, to close at 51,850.55. The S&P 500 fell 4.30 points, or 0.06%, to 7,807.24, while the Nasdaq Composite declined 120.27 points, or 0.44%, to 27,245.90. Technology and semiconductor stocks weighed on the broader market, while energy shares benefited from higher oil prices.

Crude oil prices remained elevated amid concerns over global energy supplies following attacks on Saudi Arabia and uncertainty surrounding a proposed Russia-Ukraine energy truce. Oil prices and geopolitical developments remain key factors for investors, given their potential implications for inflation and central-bank policy.

Investors are focused on the September US Consumer Price Index (CPI), scheduled for Wednesday, 14 October, followed by the Producer Price Index (PPI) and retail sales data on Thursday, 15 October. The readings will be closely watched for their implications for the Federal Reserve?s monetary policy, particularly as higher energy costs risk prolonging inflationary pressures.

The US third-quarter earnings season is also gathering pace, with major banks, including JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo, due to report results this week. Investors will assess the results for signals on consumer spending, lending demand, credit quality and the broader economic outlook.

Stocks in Spotlight:

The Nifty IT index jumped 5.22% to 29,830.10, recovering from a 0.79% decline in the previous session. The rally was supported by better-than-expected Q2 results from TCS and HCLTech, along with currency movements and changing investor sentiment towards AI-related stocks.

TCS surged 6.79%, followed by Tech Mahindra (4.93%), LTM (4.88%), Mphasis (4.79%), Wipro (4.45%), Coforge (4.46%), Infosys (4.13%), Persistent Systems (3.47%) and Oracle Financial Services Software (2.70%).

HCL Technologies rallied 8.42% after the company reported consolidated net profit increased 10.99% to Rs 5,132 crore in Q2 FY27 as compared with Rs 4,624 crore in Q1 FY27. Revenue from operations increased 3.01% quarter on quarter to Rs 35,620 crore in Q2 FY27 as compared with Rs 34,579 crore in Q1 FY27.

For FY27, HCLTech expects revenue growth of 2.5?4% YoY in constant currency, services revenue growth of 3?4% YoY, and an EBIT margin of 17.5?18.5%.

Polycab India fell 1.37% after the National Stock Exchange (NSE) announced that the stock would be excluded from the futures and options (F&O) segment with effect from 30 December 2026.

Indian Bank jumped 3.37% after the public sector lender announced that its board will meet on 15 October 2026, to consider a fund-raising plan.

Bandhan Bank jumped 9.21% amid reports that Abu Dhabi-based International Holding Company (IHC) and First Abu Dhabi Bank were in early-stage discussions to acquire a stake in Bandhan Financial Services, the bank's promoter entity. Bandhan Financial Services is reportedly exploring the sale of a 25%-32% stake to strategic investors, with the stakes held by GIC and IFC estimated to be worth $500 million-$600 million.

However, Bandhan Bank clarified that it was unaware of any such development and had not received any communication regarding the reported transaction. The bank said it could not comment on the accuracy of the news report and that it had neither withheld any material information from the stock exchanges nor had any impending material announcement. It attributed the share price movement to market conditions and said the report had no material impact on the bank.

RBL Bank dropped 7.10% despite reporting strong Q2 FY27 results. On a standalone basis, the bank reported a 170% YoY and 90% QoQ increase in net profit to Rs 481.8 crore in Q2 FY27, compared with Rs 178.5 crore in Q2 FY26 and Rs 253.7 crore in Q1 FY27. Net interest income (NII) rose 37% YoY and 29% QoQ to Rs 2,131 crore in Q2 FY27 from Rs 1,551 crore in Q2 FY26 and Rs 1,654 crore in Q1 FY27. Net interest margin (NIM) improved to 4.61% from 4.51% in Q2 FY26 and 4.13% in Q1 FY27.

Vikran Engineering jumped 11.91% after the company announced that its wholly owned subsidiary, NOPL Solar Projects, had signed a Rs 2,941.19-crore loan agreement with IREDA to partly finance a solar power project in Maharashtra.

IPO Update:

HD Fire Product received bids for 8,21,48,660 shares as against 1,84,20,492 shares on offer, according to stock exchange data at 16:33 IST on 13 October 2026. The issue was subscribed 4.46 times.

The issue opened for bidding on 13 October 2026 and will close on 15 October 2026. The price band of the IPO is fixed between Rs 258 and 271 per share. An investor can bid for a minimum of 55 equity shares and multiples thereof.

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