Oil Surge Overwhelms Early Gains
The Nifty 50 slid 0.70% to 22,363.35 and the Sensex fell 0.76% to 71,924.68 as a sharp overnight spike in Brent crude past $107 a barrel, triggered by reported attacks on Saudi Arabia, erased an early positive bias. Crude at 105.52 continues to cast a long shadow over India's import bill and inflation trajectory, even as today's reading shows a modest intraday pullback. With bond markets having been shut overnight, Indian equities absorbed the full force of the move in a single session, dropping nearly 548 points on the Sensex at the lows.
RBI's Rupee Rescue Act
In a rare bright spot, the rupee staged its steepest single-day rally in over six months, jumping 96 paise to close at 95.75-95.77 against the dollar after the RBI clamped down on speculative currency trades and opened a special dollar window for state-owned oil marketing companies. This followed a near all-time low for the currency, underscoring how aggressively the central bank intervened to arrest the slide. Importer and corporate dollar demand capped further gains, and elevated crude prices mean the rupee's stability remains contingent on continued central bank vigilance.
HCLTech Beats, But Growth Cools
HCLTech reported an 11.5% rise in consolidated revenue to ₹35,620 crore and a 21.2% jump in net profit to ₹5,132 crore, alongside an upgraded FY27 revenue growth guidance of 2.5-4%, a global partnership with Anthropic, and an AI services revenue surge of 28% sequentially to $219 million. The company also declared a ₹12 per share interim dividend. Yet growth slipped to a three-year low on a reported basis, a reminder that even strong headline beats can mask decelerating underlying momentum in a sector already under pressure, with Nifty IT down 0.79% to 28,349.6 today.
Bond Yields Hit Three-Year High
India's 10-year benchmark bond yield surged to around 7.35-7.39%, its highest in roughly three and a half years, after the RBI moved to drain liquidity by raising the cash reserve ratio and announcing a ₹25,000 crore bond sale. This followed September retail inflation accelerating sharply to 5.54% from 4.83% in August, driven by food and vegetable prices, which had already prompted an RBI repo rate hike of 25 basis points on October 7. Rising yields alongside a weaker rupee defense effort point to a tightening liquidity environment that could pressure rate-sensitive sectors.
FIIs Sell, Domestic Flows Cushion
Foreign institutional investors sold a net ₹1,708 crore of Indian equities even as domestic institutional investors bought a net ₹3,045 crore, continuing a now-familiar pattern of FII outflows being absorbed by steady domestic buying. This divergence is reinforced by record SIP inflows of over ₹32,490-38,306 crore range reported in September and a 31% rise in equity mutual fund inflows, even as debt fund redemptions dragged overall industry flows negative. The resilience of domestic flows has repeatedly acted as a shock absorber against bouts of foreign selling tied to global risk-off moves.
IPO Pipeline Stays Busy
Four IPOs, Bonfiglioli Transmissions, Tonbo Imaging, Sahajanand Medical Technologies and Zetwerk, open for subscription on October 15 and close October 19, with combined issue sizes ranging from ₹475 crore to over ₹5,012 crore. Notably, Bonfiglioli, Tonbo, and Sahajanand are pure offers for sale with no fresh capital reaching the companies, while Zetwerk's issue includes a ₹2,830 crore fresh component tied partly to AI infrastructure and US data-centre-linked power equipment orders worth around ₹2,000 crore. A busy primary market calendar amid volatile secondary markets will test investor appetite for new paper.
Credit Stress Resurfaces
Bank of India declared Future Enterprises' outstanding account of ₹575.40 crore as fraud and reported it to the RBI, making full provisions for the amount. While an isolated legacy exposure, such disclosures are a reminder that corporate credit stress from earlier cycles continues to surface periodically in bank balance sheets even as headline asset quality metrics for the sector have broadly improved.