Summary of this article
Sensex surged 900 points today driven by value buying.
Softening global crude oil prices fueled the market rally.
Top stock gainers included ITC, TCS, and Eicher Motors.
The BSE Sensex climbed by 900 points or 1.27 per cent to an intraday high of 72,502.92 on October 9. The Nifty 50 index soared 1.36 per cent to an intraday peak of 22,534.4.
Market participants witnessed a wave of optimism as the indices opened in the green and extended their gains significantly. The sudden reversal in momentum brought relief to D-street after the steep losses recorded during the previous trading session.
Shares of ITC, TCS and Eicher Motors emerged as the top-gainers among Nifty 50 stocks, trading higher by 3.55 to 4.35 per cent. Other major gainers included Apollo Hospitals and Adani Ports, which traded higher by 3.49 per cent and 2.43 per cent on the NSE. At the time of writing, 46 constituents of the index were trading in the green and four stocks traded in the red.
Why Are Nifty and Sensex Gaining
The rebound seen in the domestic stock market can be attributed to likely value buying, strong corporate earnings, softening crude oil prices, easing geopolitical tension, a rising rupee, and US bond yields easing from highs.
Surge In Value Buying
Investors are likely to have rushed into the market on October 9 to buy fundamentally strong stocks following selloffs in the two preceding sessions. The sudden dip is likely to have created an attractive entry point for both institutional and retail investors. The accumulation of shares at lower price levels is expected to have provided the support necessary for the indices to stage a turnaround today.
Strong Corporate Earnings
Market sentiment also received a boost from the double-digit quarterly financial results posted by industry leaders. Tata Consultancy Services posted a growth of 11.70 per cent year-on-year in its total income as it grew to Rs 74,525 crore in Q2FY27. The company’s profit-after-tax also grew by 14.86 per cent year-on-year to Rs 13934 crore in the same quarter. The solid fundamental performance prompted investors to pour capital back into Indian IT companies, fueling the broader market rally.
Softening Crude Oil Prices
Respite in the global commodities market accelerated the upward trajectory of Indian equities. Brent crude oil prices began to soften during trading hours, providing significant relief. At the time of writing, Brent Crude prices traded around $103.52 per barrel, down by 0.73 per cent, and West Texas Intermediate crude prices traded around $90.79, down by 0.77 per cent.
India relies heavily on imported oil, meaning that lower crude prices translate to reduced import bills and a more manageable current account deficit.
Easing Geopolitical Tension
Global risk appetite is also likely to have improved following statements from US President Donald Trump regarding the Middle East. Trump announced that the United States will not launch an attack on Iran before the midterm congressional elections in November. He also noted that the two countries are having productive talks about ending the conflict. The de-escalation is expected to have benefited market sentiment by dispelling fears of a broader regional war that could further disrupt global supply chains and trigger more capital outflows.
Rupee Rising
The domestic currency showcased a recovery, providing another layer of support to Dalal Street. The Indian rupee opened four paise stronger against the US dollar at 96.74, compared to the previous close of 96.78. A rising rupee makes Indian equities more attractive to foreign portfolio investors by protecting their dollar-adjusted returns. It also heavily reduces the cost of importing essential goods, which can bolster the profit margins of domestic manufacturing companies and lift the overall mood of the stock market.
Bond Yields Down From Highs
United States Treasury bond yields dipped across different durations, including the benchmark 10-year and two-year notes, signalling an easing of global borrowing pressures. When American treasury yields cool down from their highs, the appeal of safe-haven assets diminishes. This, in turn, redirects foreign institutional investment back into emerging equity markets like India, sustaining the Sensex rally.
