Bulls Reclaim Ground After Brutal Stretch
The Sensex closed at 72,382.47, up 472.77 points or 0.66%, while the Nifty50 ended at 22,555.75, higher by 133.80 points or 0.60%, snapping an eight-week losing streak. The bounce comes alongside softer crude, with Brent near $100.57, and a clutch of strong Q2 business updates from banks and retail names. Traders are now eyeing a push toward the 22,800 zone on Nifty during the weekly expiry session, with IT, banking, and Trent in focus.
The FPI Overhang Nobody Can Ignore
Even as markets rally, foreign portfolio investors have pulled nearly $30 billion from Indian equities this year, putting 2024 on track for the biggest annual outflow ever, with $4.1 billion exiting in September and another $1.5 billion-plus in October alone. This selling has pushed India's share of global equity markets below 3% as dollar-denominated Indian stocks have fallen 19%, and the Nifty is down 14% year-to-date, its worst showing since 2011. The one-day bounce is encouraging, but it sits against a structural backdrop of sustained foreign selling that a single good session does not reverse.
Bank Q2 Updates Show Resilient Credit Growth
Kotak Mahindra Bank's net advances climbed 25% YoY to Rs 5.77 lakh crore with deposits up 23%, while Axis Bank's gross advances rose 23% YoY to Rs 13.85 lakh crore with deposits up 21%. IndusInd Bank posted more modest 11% advance growth, and HDFC Bank shares rose nearly 2% following the Bagchi appointment and its own business update. These provisional Q2 numbers collectively paint a picture of steady, broad-based credit expansion across the banking system heading into full results season.
Retail and Consumer Divergence Widens
Trent's standalone revenue rose 23% YoY to Rs 5,788 crore with Zudio crossing 1,000 stores, yet its shares still slipped 0.86% to ₹2,575 on the BSE, illustrating how richly priced growth stories face scrutiny even on strong prints. Elsewhere, value retail stocks slid on cautious consumer spending signals, and names including Hindustan Unilever, Britannia, Tata Consumer, and Godrej Consumer hit fresh 52-week lows this week. Nykaa bucked the trend, jumping over 5% as Q2 net sales value growth topped 30%, prompting Goldman Sachs to raise its price target.
Policy Crosswinds: RBI, SEBI and GST Reform
The RBI's MPC has begun its three-day meeting, with most economists expecting the repo rate to be held steady for now, though Bank of Baroda flags a possible 50-75 bps hike cycle starting in December amid inflation concerns. SEBI, meanwhile, is set to partly reverse derivative settlement rules by month-end to align more closely with US and European pricing mechanisms, while also launching Project Jagrook to combat anonymous tips and finfluencer-driven speculation. Separately, the GST Council is weighing enforcement reforms that would shift routine disputes toward recovery and penalties rather than arrest, reserving criminal action for serious fraud.
Trade Talks Stall, China Probes Widen
Finance Minister Nirmala Sitharaman indicated India-US trade deal talks have reached a 'plateau,' with further concessions proving difficult amid unresolved trade deficit issues with both the US and China. In parallel, India has launched anti-dumping probes into five Chinese products following domestic industry complaints, reflecting rising friction over import practices even as the broader deficit with China intensifies. These developments add a layer of policy uncertainty for export-oriented and import-competing sectors alike.
Global Tech Rally Offers a Tailwind
Wall Street's Nasdaq climbed 1.05% to a record 27,477.31, driven by megacap strength in Nvidia, Microsoft, Meta, and Tesla, while the S&P 500 added 0.66% to 7,773.95 and the Dow Jones rose 0.18% to 51,267.9. Asian markets followed through, with the Nikkei up 0.53% to 70,318.44, even as oil eased after OPEC+ held November output steady despite Brent trading above $100. This global risk-on tone, combined with easing crude, provides a supportive backdrop for Indian equities even as domestic FPI flows remain negative.
Corporate Actions in the Spotlight
Mukesh Ambani's Jio Platforms is planning a $3.8 billion IPO on October 21, with proceeds largely earmarked to repay telecom division debt while the company expands its AI, cloud, and enterprise businesses. ITC shares jumped after Citi turned bullish following a 34% decline, arguing the earnings downgrade cycle is largely over and valuations now offer improved risk-reward. Bajaj Finance shares rose 3-5% after strong Q2 AUM growth of 26.5% YoY, with JPMorgan and Jefferies both turning more constructive on the stock's outlook.