Ninth Weekly Loss in Sight
The Nifty 50 closed at 22,231.8, down 2.39%, its lowest level in 18 months, as the index hurtles toward an unprecedented ninth consecutive weekly decline, something not seen in 25 years according to reporting. The Sensex shed 2.02% to settle at 71,593.24, with BSE-listed companies losing nearly ₹13 lakh crore in market capitalisation over two sessions. The index is now over 10% below its August swing high of 24,774 and nearly 16% off its all-time peak of 26,373, underscoring the severity of the drawdown.
TCS Beats but Growth Slows
Tata Consultancy Services reported Q2 net profit up 15% YoY to ₹13,884 crore on revenue of ₹73,188 crore, up 11.2%, beating analyst expectations on the headline numbers even as sequential revenue growth of just 0.2% marked its slowest Q2 in three years. The company declared a second interim dividend of ₹12 per share, with deal wins of $9.6 billion landing at the midpoint of analyst projections. Notably, AI now contributes over 10% of TCS revenue with an annualised run rate crossing $3 billion, backed by new partnerships with Porsche and Best Buy, though margins remained flat at 24%, signalling demand stays muted despite the AI narrative.
Crude and FII Exodus Compound Pain
Nifty's slide has been driven by a confluence of surging crude oil prices, now at 103.49 (-0.76% on the day but elevated on Middle East tension concerns), and accelerating foreign portfolio outflows of ₹31,282 crore withdrawn in just the first five October sessions. Hindu BusinessLine attributed the fresh 52-week low directly to this crude-and-FII combination, while rising US Treasury yields and a weaker rupee have added to the pressure cooker. The rupee itself slipped 13 paise to close at 96.88 against the dollar amid broader risk aversion.
RBI's Liquidity Drain Falls Flat
The RBI's attempt to mop up surplus liquidity saw banks park just ₹79,655 crore in a 29-day variable rate reverse repo auction, less than half the ₹2 lakh crore targeted, with system liquidity still sitting at a surplus of ₹4.24 lakh crore. This muted response raises questions about the pace of monetary policy transmission following the recent rate hike. Separately, RBI's dollar sell-buy swaps aimed at supporting the rupee have pushed up forward premiums, making hedging costlier for foreign investors and nudging companies toward rupee borrowing instead.
Inflation Expectations Climb at Home
An RBI household survey showed inflation expectations for the coming year rising to 10%, driven largely by anticipated increases in living expenses and food prices, reinforcing the hawkish policy backdrop. This comes even as GST Council reforms unveiled this week left tax rates unchanged, focusing instead on process relief: faster refunds for roughly 38,700 exporters, input tax credit on employee health and life insurance, and the scrapping of GST officers' arrest powers with prosecution thresholds raised to ₹5 crore. PM Modi welcomed the reforms as enabling faster decisions and lower compliance costs, though they do little to offset the inflation expectation overhang.
Banks Face Treasury Income Hit
Analysts expect bank treasury income to collapse nearly 60% in the July-September quarter, down to roughly ₹5,500 crore from ₹13,100 crore a year earlier, as surging government bond yields erode investment portfolio gains. Public sector banks with larger G-Sec holdings are expected to bear a more pronounced impact. Despite this overhang, Bank Nifty at 54,515.05 (-1.11%) is holding up relatively better than the broader Nifty today, a divergence flagged in market commentary.
Order Wins Offer Pockets of Strength
Amid the broader selloff, company-specific order momentum continued: KEC International secured ₹1,030 crore in fresh orders across transmission lines, wind, and cables, pushing its FY27 order intake above ₹8,600 crore, while NCC Ltd received a ₹1,286 crore Letter of Acceptance for a Telangana road project to be executed over 18 months. These wins illustrate that order-book momentum in infrastructure and capital goods continues even as headline indices struggle.
Global Risk-Off Mirrors Domestic Mood
Overnight, the S&P 500 fell 0.47% to 7,765.36 and the Nasdaq dropped 1.25% to 27,193.34, its worst session in seven weeks, as crude's surge and chip-sector weakness following an OpenAI revenue target cut spooked investors; the Dow Jones, however, edged up 0.10% to 51,231.64. Asian markets extended the weakness this morning, with the Nikkei down 1.07% at 68,299.98 and Softbank sliding over 5%, while Hang Seng was flat at 23,785.79, reflecting a broadly cautious global risk tone feeding into Indian sentiment.