Stock market rally: The Sensex and Nifty 50 surged over 2% during intraday trade, raising hopes of a sustained recovery on Dalal Street ahead of Diwali. The rally came amid improving corporate earnings, renewed interest in large-cap stocks and a sharp correction in artificial intelligence-linked equities overseas.
The 30-share Sensex jumped more than 1,500 points, or over 2%, to touch an intraday high of 74,330. Meanwhile, the Nifty 50 climbed approximately 433 points, or 1.9%, to hit the day’s high of 23,056, reclaiming the psychologically important 23,000 mark.
Vinod Nair, Head of Research at Geojit Investments Limited, attributed the domestic market’s strength to better technology earnings, currency stability and easing bond yields.
“Indian equities advanced as stronger-than-expected technology earnings boosted confidence in corporate profit growth and lifted benchmark-heavy large-cap stocks. Rupee stability and easing bond yields further supported sentiment, bringing financial stocks into focus,” Nair said. Nair believes that the strong IT-led earnings season and expectations of decent overall Q2 corporate performance indicated resilience despite a challenging global environment.
Why is the Indian stock market rising today?
IT stocks rally
IT stocks emerged as key drivers of Thursday’s market rally, with Tata Consultancy Services (TCS), Infosys, HCL Technologies and Tech Mahindra extending their gains for a third consecutive session. Stronger-than-expected technology earnings and optimism following HCL Tech’s results boosted sentiment.
The rally came even as Asian markets tumbled amid concerns over elevated valuations of artificial intelligence-linked stocks. US consumer inflation rose faster than expected, raising questions about the Federal Reserve’s policy outlook. The correction in AI stocks could benefit Indian equities, which have underperformed markets riding the global AI boom.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the correction could change foreign investor flows.
“From the Indian market perspective, the correction in AI stocks is a positive. FIIs who have been selling Indian stocks and buying AI stocks will halt this trend and, under favourable conditions, might even reverse IT,” Vijayakumar said.
He added that the healthy start to the September-quarter earnings season was supporting the market. Strong IT results and expectations of healthy second-quarter earnings from financial companies could provide further resilience.
Jio IPO buzz lifts Reliance Industries, Airtel
Gains in heavyweight stocks Reliance Industries and Bharti Airtel also contributed to the rally, amid renewed attention on India’s telecom and digital services sector following Jio Platforms’ filing of its Red Herring Prospectus (RHP) for its proposed initial public offering (IPO).
The issue will open for subscription on Wednesday, October 21, and close on Friday, October 23, 2026. Shares are scheduled to list on October 28. Jio Platforms has set a price band of ₹1,065– ₹1,119 per equity share and expects to raise ₹28,755 crore to ₹30,213 crore.
The IPO comprises a fresh issue of up to 27 crore equity shares, with no offer-for-sale component. Existing shareholders will not sell their holdings through the offering. Even at its revised size, the issue is positioned to surpass Hyundai Motor India’s ₹27,870 crore IPO in 2024, potentially making it India’s largest-ever public issue in rupee terms.
Rupee strengthens, crude oil price decline adds to sentiment
Currency and commodity movements provided additional support to market sentiment. The Indian rupee opened 0.2% higher at 94.92 against the US dollar, compared with its previous close of 95.15. The dollar weakened after touching an 18-month high overnight.
Crude oil prices also declined, easing some pressure on India’s energy import bill. Brent crude futures fell $1.76, or 1.75%, to $104 per barrel, while US West Texas Intermediate crude futures dropped $1.02, or 1.07%, to $94.07 per barrel.
Nifty outlook: Can the rally sustain above 22,800?
With the Nifty reclaiming 23,000 during Thursday’s session, investors are now assessing whether the latest rally marks the beginning of a sustained recovery or merely a temporary bounce.
Jigar S Patel, Senior Manager – Technical Research at Anand Rathi Share and Stock Brokers Limited, identified 22,800 as the crucial level to watch.
According to Patel, the Nifty’s breakout above this resistance indicated improving short-term momentum. The hourly Relative Strength Index (RSI) also crossed 70 for the first time since August 2026, highlighting a significant increase in buying strength. However, the next important test will be whether the index can hold above 22,800 during a corrective phase.
Patel explained that the earlier resistance could now act as support, a technical development commonly described as a role reversal. A successful retest of 22,800, accompanied by the hourly RSI remaining above 30, would suggest that the recovery is supported by sustained buying rather than short-lived speculative activity.
Such a development would strengthen the possibility of a genuine trend reversal and reduce concerns that the rally is merely a temporary dead-cat bounce. Conversely, a sustained decline below 22,800 could weaken the bullish technical setup and raise doubts about the recovery’s durability.
For now, the combination of encouraging earnings, renewed buying in IT and financial stocks, and the potential rotation of global capital away from expensive AI-linked equities has improved market sentiment.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
