Mumbai wakes up to a market with its confidence back. After two straight months of red Fridays, Dalal Street finally has something to smile about as it opens for business this Monday morning. The Sensex and the Nifty snapped an eight-week losing streak, the longest run of weekly declines in almost 25 years, and traders are asking the same question: can this rally actually hold?
The numbers from last week tell the story of a comeback. On Friday, the Nifty rose 288.65 points, or 1.30 per cent, to close at 22,520.45. The Sensex jumped 879.09 points, or 1.23 per cent, to finish at 72,472.33. It was a broad move, led by buying in information technology, FMCG, automobile and financial stocks.
What broke the losing streak
Every rally has a trigger, and this one had several lining up at once. The biggest was TCS. The IT giant kicked off the Q2 earnings season on October 8 with numbers that beat most estimates: net profit of Rs 13,884 crore, up 15 per cent from a year ago, revenue of Rs 73,188 crore, and a Rs 12 per share interim dividend with October 14 as the record date. Its annualised AI revenue has now crossed $3 billion, more than a tenth of total revenue.
The market loved it. On Friday, TCS shares jumped nearly 5 per cent, and the Nifty IT index rallied around 3.3 per cent in a single session. Infosys, Wipro, HCLTech and Tech Mahindra all joined the party. After months of hand-wringing over AI disrupting traditional IT services, TCS gave Dalal Street a reason to believe the incumbents might be just fine.
Interestingly, the rally survived some genuinely bad news. The US government has suspended several Indian IT companies, including TCS, Infosys, Wipro and HCLTech, from the Permanent Labour Certification (PERM) programme used for employment-based green cards. Investors, in their newfound optimism, simply shrugged it off.
Five things to watch this week
- Inflation data, at home and abroad. India’s September CPI inflation numbers are expected early this week, and the US releases its September CPI report on Wednesday. With the RBI having raised the repo rate to 5.50 per cent in a surprise move last week, every inflation print will be read for clues about whether more hikes are coming.
- Crude oil above $100. Brent is trading above $100 a barrel, with uncertainty around Iran and the Strait of Hormuz keeping supply fears alive. For an oil-importing economy like India, this is the single biggest wild card.
- The rupee and foreign flows. FIIs pulled out a staggering Rs 44,166 crore in October, a number that was largely cancelled out by domestic institutional buying of Rs 40,355 crore. Whether foreigners return now that the market has turned will decide how far this rally runs.
- More Q2 earnings. TCS set the bar. Now investors will watch whether the rest of corporate India, banks especially, can deliver. Quarterly updates on advances and collections from lenders have already been encouraging.
- The technical picture. The Nifty has spent weeks battered below key levels. Holding above 22,500 through the week would signal genuine strength rather than a dead-cat bounce.
What the experts are saying
The mood among market watchers is cautiously upbeat, a marked change from the gloom of the past two months. After the RBI’s shift to what it calls “calibrated tightening”, most analysts expect Dalal Street to stay range-bound in the short term but with a better tone. The valuation picture has improved after the correction: the Nifty trades around 18.3 times forward earnings, not cheap but no longer the stretched levels of the summer.
FAQs
Why did the Sensex and Nifty rise last week?
The rally was driven by strong Q2 results from TCS, which lifted IT stocks, plus broad buying in FMCG, auto and financial shares. Domestic institutional investors provided steady support even as foreign investors continued to sell.
What is the Sensex trading at right now?
The Sensex closed last week at 72,472.33 and the Nifty at 22,520.45, both up roughly 0.5 to 0.8 per cent for the week after snapping an eight-week losing streak.
Will the market rally continue this week?
That depends on India’s inflation data, US CPI numbers on Wednesday, crude oil prices and whether foreign investors slow their selling. A hold above 22,500 on the Nifty would be a positive sign.
Why are crude oil prices important for Indian markets?
India imports most of its oil, so crude above $100 a barrel raises inflation risks, pressures the rupee and could force the RBI into further rate hikes, all of which weigh on equities.
Is this a good time to invest?
Analysts suggest largecaps look attractive after the correction, but advise a staggered approach and longer horizons for mid and smallcaps, given FII and currency headwinds. This is general information, not personal financial advice.
The lights are back on at Dalal Street, but nobody is declaring a festival just yet. This week will show whether Friday was a turning point or merely a pause in a tired market’s descent. Either way, after eight straight weeks of losses, Monday morning feels different. And sometimes, in markets, feeling different is where the story starts.
