Dalal Street roared back on Wednesday as the Sensex and Nifty staged a powerful rebound, recovering a large part of the ground lost in Monday’s sharp selloff. The rally was fueled by fresh optimism around a possible India-US trade deal, a blockbuster opening day for the Jio Platforms IPO, strong second-quarter earnings and a firm global setup.
The 30-share BSE Sensex surged over 820 points in morning trade to touch 74,675.54, a gain of about 1.1 percent, while the 50-share NSE Nifty climbed nearly 218 points to cross 23,100. IT heavyweights led the charge, with Infosys rising more than 3 percent and TCS close behind.
The comeback came after markets had opened the week on a shaky note. On Monday, the Sensex had dropped close to 900 points, wiping nearly Rs 5 lakh crore off the combined market value of BSE-listed companies. Markets then remained shut on Tuesday for Dussehra, so Wednesday’s rally was the first chance for investors to react to two days of newsflow.
Trump’s trade remarks lift sentiment
The single biggest trigger was US President Donald Trump’s comment that India and the US are “pretty close” to striking a trade deal. His remarks came on Tuesday at the Oval Office, at a time when US Secretary of State Marco Rubio was in India discussing trade, energy, technology, defence and people-to-people ties with Indian officials.
Markets have been jittery for months over tariff uncertainty. India and the US had finalised the framework for the first phase of the bilateral trade agreement in February, but changes in the US tariff landscape forced fresh rounds of negotiation. Trump’s latest comments convinced traders that a deal may finally be taking shape, and that relief rippled straight into Indian equities.
Jio IPO opens to a roaring start
The Rs 30,213-crore IPO of Jio Platforms, one of India’s most-awaited public issues, opened for subscription on Wednesday and was subscribed about 85 percent within minutes of opening. By the end of day one, the issue was subscribed more than 2.2 times overall, with the qualified institutional buyer portion subscribed nearly 6.7 times.
The IPO also supported the rupee, which rose 18 paise to 94.73 against the US dollar in early trade. Currency traders said dollar inflows linked to the issue, along with the Reserve Bank of India’s support, kept the rupee firm.
Strong Q2 earnings add fuel
Corporate results gave the rally a solid foundation. UltraTech Cement jumped nearly 3 percent after Jefferies raised its target price following a consolidated net profit of Rs 1,494 crore for the July-September quarter, up more than 21 percent from a year ago. Tech Mahindra surged on a 32.7 percent profit jump to Rs 1,585.6 crore, along with a 1:1 bonus issue and an interim dividend of Rs 15 per share.
Hindustan Zinc reported a 142 percent leap in net profit to Rs 6,412 crore, while Bajaj Finance grew profit 29 percent to Rs 6,367 crore with improving asset quality. With IT and banking, the two laggard sectors, now showing better numbers, analysts said domestic institutional investors are likely to buy further corrections. “This is a stock picker’s market now,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments.
IT stocks ride the ‘anti-AI’ trade
Nifty IT was the top sectoral gainer, jumping more than 2 percent. The global rout in AI-linked stocks has, ironically, helped Indian IT majors, which are being seen as ‘anti-AI’ plays with attractive valuations. Infosys and TCS gained around 3 percent each, with HCLTech and Tech Mahindra rising about 2 percent.
Valuations are also turning friendly. Jefferies analyst Mahesh Nandurkar noted that largecaps now trade at a 30 percent discount to midcaps, wider than the 10-year average discount of 20 percent, while the earnings growth gap between the two is expected to narrow over FY26-28.
What should investors watch now?
Despite the rally, caution is warranted. Brent crude traded above $110 a barrel and US bond yields remained elevated, which could keep pressure on emerging markets. Analysts expect a “sell on rally” pattern to continue in the near term, even though improving earnings, fair largecap valuations and strong domestic liquidity should support the market on declines.
FAQs
Q1. How much did the Sensex rise on October 21, 2026?
The Sensex surged over 820 points, or about 1.1 percent, to 74,675.54 in morning trade, recovering most of Monday’s nearly 900-point fall.
Q2. What triggered the market rally?
Trump’s remark that India and the US are close to a trade deal, the strong opening of the Jio Platforms IPO, robust Q2 earnings from companies like UltraTech Cement and Tech Mahindra, and gains in IT stocks.
Q3. How was the Jio Platforms IPO response on day one?
The Rs 30,213-crore issue was subscribed about 85 percent within minutes of opening and ended day one at more than 2.2 times overall, with strong institutional demand.
Q4. Why did IT stocks rise?
Indian IT majors are being viewed as ‘anti-AI’ beneficiaries amid the global selloff in AI stocks, and their valuations look attractive after a long underperformance.
Q5. Is the rally sustainable?
Analysts say improving earnings, fair largecap valuations and domestic liquidity support the market, but crude above $110 and rising bond yields mean a “sell on rally” pattern may continue in the near term.
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