Indian equity benchmarks extended their recovery momentum for a second consecutive session on Tuesday, with the BSE Sensex closing 685.34 points higher at 73,067.81 (up 0.95%) and the NSE Nifty 50 holding above 22,700 at 22,776.10 (up 0.98%). This marked the second consecutive session of recovery after an extended selloff that had dragged the benchmark indices lower, with the Nifty 50 closing at its session high after opening around 47 points higher and touching an intraday low of 22,561.60. The positive momentum came as Brent crude moderated below $100 a barrel and WTI crude futures trading near $88 per barrel, while India VIX fell sharply to 13.61, signalling reduced near-term volatility. Bank Nifty rose 414.30 points (0.76%) to close at 55,128.40, with Kotak Mahindra Bank among the standout performers, gaining around 3.82%. Broader markets outperformed with Nifty Midcap 100 rising 1.08% and Smallcap 100 advancing 1.56%, while market breadth turned decisively positive with the advances-declines ratio at 1.82, its highest since July 10. BSE-listed companies added nearly ₹6 lakh crore in market capitalisation over the two sessions.
Trent shares surged 12% after the Zudio parent reported a 23% year-on-year increase in standalone revenue from operations to ₹5,788 crore for the April-September period of FY27, surpassing market expectations and triggering strong buying interest. Kotak Mahindra Bank gained more than 3.82% after the private sector lender reported a nearly 25% year-on-year increase in net advances to ₹5.77 lakh crore for the July-September quarter. The FMCG basket gained more than 1%, with most companies reporting healthy quarterly updates. Sectoral performance was largely positive with Chemicals leading gains, rising over 2%, followed by Pharma up 1.7%, Oil & Gas 1.6%, and FMCG 1.4%. Nifty Bank rose 0.8% underpinned by healthy Q2 business updates and rate-hike positioning, while IT shed nearly 2% and PSU Banks and Realty also closed in the red. Trent, BSE and Kotak Mahindra Bank were the top Nifty gainers, while Coal India, Tech Mahindra and Max Healthcare ended as the key laggards. Capital market stocks continued to attract buying interest, with BSE rising 4%, while most air-conditioner companies rose on expectations of strong demand, with PG Electroplast gaining 8%.
Foreign institutional investors were net sellers of equities worth ₹2,961 crore on Tuesday, while domestic institutional investors were net buyers to the tune of ₹5,089 crore. This represents a moderation from Monday's FII selling of ₹4,699 crore, indicating some stabilisation in foreign investor sentiment. FIIs bought equities worth ₹11,258.72 crore and sold shares worth ₹14,220.02 crore on Tuesday, while DIIs bought shares worth ₹20,146.40 crore and sold ₹15,057.48 crore. The sustained buying interest from domestic institutions provides crucial support to the market amid ongoing foreign fund outflows.
The latest recovery comes ahead of the Reserve Bank of India's upcoming monetary policy decision on Wednesday, with the consensus expecting a 25 basis point repo rate hike from 5.25% to 5.50% - marking the first increase since February 2023. The positive sentiment was supported by falling crude oil prices, with Brent slipping back below $100 a barrel, supporting market sentiment. Quarterly business updates were largely in line with expectations, while market breadth remained firmly positive, with two stocks advancing for every one that declined. Analysts said October has started on a cautious note as the US-Iran conflict worsens, while the central bank is expected to raise rates at its latest monetary policy review Wednesday. However, the silver lining around these gathering dark clouds is the September quarter results that will kick off from next week onwards. As per Dinshaw Irani, MD & CEO, Helios India, "Given that the Indian markets trade close to their long-term average valuations, the positive results should provide a fair bit of support. The upcoming festive season, too, should provide clues as to the strength of domestic demand." On the technical front, the 22,400-22,380 zone could act as immediate support, with a breach below this zone potentially reviving selling pressure towards 22,220.
On the currency front, the rupee depreciated 13 paise to close at 96.42 against the US dollar, weighed down by sustained dollar demand from foreign portfolio investors and oil companies. Jateen Trivedi, VP Research Analyst at LKP Securities, said the rupee range for Wednesday is expected between 96.00–96.75, with the RBI policy outcome and its guidance likely to keep the currency volatile. Spot gold traded near $4,153, up about 0.4%, with silver holding above $61, supported by a pullback in the dollar and US Treasury yields from recent peaks. Brent crude slipped below $100 a barrel and WTI traded near $88, as rising Gulf supply and planned G7 reserve releases pointed to a loosening oil market.
