Indian equity benchmarks staged a recovery on Friday, October 9, after oil prices eased and US President Donald Trump signalled a pause in potential military strikes against Iran, offering some relief to investors following Thursday’s steep sell-off. The previous session’s market rout had wiped out more than ₹10 lakh crore in investor wealth.
The Sensex climbed as much as 688 points, or 0.96%, to an intraday high of 72,281.58, while the Nifty 50 advanced 217 points, or 1%, to 22,449.40.
Among individual stocks, Tata Consultancy Services (TCS), Infosys, HCL Technologies and Tech Mahindra rallied as much as 5%, helping the Nifty IT index climb more than 3%. Eternal, Bharat Electronics, Reliance Industries, ICICI Bank, Trent, Mahindra & Mahindra and IndiGo bucked the broader recovery, falling as much as 2%. Nifty FMCG gained nearly 1%, while the pharma and oil and gas indices declined close to 1%.
Friday’s gains came after a punishing session on Thursday, when the market rout erased more than ₹10 lakh crore in investor wealth. The scale of the previous decline left investors assessing whether the latest recovery could provide a more sustained opportunity to rebuild positions.
The rebound was supported by a combination of lower crude prices, reduced immediate fears of military escalation and strength in technology stocks following TCS’s quarterly results.
However, the negative market breadth indicated that the improvement in headline indices did not reflect a uniform shift in investor sentiment. Several stocks continued to decline even as the Sensex and Nifty recovered part of their recent losses.
Here are five key factors driving the stock market rebound.
1. IT stocks rally after TCS Q2 results
Information technology stocks led the market recovery, with buying interest picking up after TCS reported a 15% year-on-year increase in consolidated net profit for the September quarter of FY27. The company’s profit rose to ₹13,884 crore from ₹12,075 crore a year earlier, while revenue increased 11% to ₹73,188 crore.
TCS shares surged after the results, lifting sentiment across the IT sector. Infosys, HCL Technologies and Tech Mahindra also advanced, with gains of up to 4%.
The sector’s performance came despite concerns over US immigration policy after Trump reiterated his push for a $100,000 fee for H-1B non-immigrant visas. Investors appeared to focus on corporate earnings and the growth potential of artificial intelligence (AI), which has emerged as an important business opportunity for India’s technology services companies.
The positive momentum in IT stocks helped the sector outperform the broader market during the session.
2. Crude oil prices retreat from recent highs
Easing crude oil prices provided another source of relief for Indian equities. Oil prices fell on Friday as investors assessed the possibility of reduced military escalation in the Middle East and its implications for global energy supplies.
Brent crude futures declined 72 cents, or 0.7%, to $103.53 a barrel by 0220 GMT. US West Texas Intermediate (WTI) crude futures dropped 52 cents, or 0.6%, to $90.97 a barrel.
The pullback followed a roughly 4% jump in Brent prices on Thursday, driven by increased attacks on shipping transporting crude from the Middle East. Despite Friday’s decline, Brent remained on course for a weekly gain, reflecting persistent concerns about supply disruptions.
For India, which relies heavily on imported crude oil, sustained high prices can increase the import bill, put pressure on the rupee and complicate the inflation outlook. Lower oil prices can ease some of these concerns, although crude remained elevated enough to pose a challenge for the domestic market.
3. Trump’s comments on Iran ease immediate geopolitical concerns
Investor sentiment also received support from Trump’s latest remarks on the conflict with Iran. In a social-media post, the US president referred to “productive discussions” with Tehran and said crude oil was flowing through the Strait of Hormuz in record amounts.
Trump indicated that the US would refrain from launching fresh strikes against Iran before next month’s US elections. The comments offered some reassurance to markets worried about further disruption to energy supplies and commercial shipping routes in the region.
However, the situation remained uncertain. Trump said the US naval blockade of Iranian ports would continue, even as Tehran intensified attacks in the strategic waterway, raising risks for vessels carrying crude to global markets.
The New York Times subsequently reported that the US had drawn up plans for three days of strikes targeting Iranian drone and missile arsenals, energy infrastructure and other sites.
Consequently, while Trump’s remarks helped ease immediate concerns, the possibility of further escalation continued to pose a risk to global markets.
4. Buying in select heavyweight stocks supports the rebound
Apart from IT shares, buying interest in several large-cap stocks helped lift the benchmark indices. Shares of ITC, Adani Ports, HDFC Bank, Power Grid, Bharti Airtel and Hindustan Unilever advanced by as much as 2%.
Gains in these stocks provided support to the broader indices even as several prominent constituents, including Reliance Industries, ICICI Bank and Bharat Electronics, traded lower.
Shrikant Chouhan, head of equity research at Kotak Neo, identified 22,200–22,150 on the Nifty and 71,500–71,300 on the Sensex as immediate support zones for traders.
A decisive break below these levels could intensify selling pressure, potentially pulling the Nifty towards 22,000–21,750 and the Sensex towards 70,800–70,000. On the upside, the immediate resistance zone stands at 22,300–22,400 for the Nifty and 71,800–72,100 for the Sensex. A sustained move above these resistance levels could trigger a quick intraday recovery towards 22,500 on the Nifty and 72,500 on the Sensex, Chouhan said.
However, he cautioned that a breach of key support levels could pave the way for another leg of selling.
For traders, the immediate focus will therefore remain on whether the benchmarks can sustain their recovery above resistance levels or face renewed pressure if support levels give way. For longer-term investors, developments in crude oil, foreign fund flows and corporate earnings are likely to remain critical determinants of market direction.
What lies ahead for Dalal Street?
Elevated crude oil prices and high US bond yields could continue to weigh on Indian equities, according to V K Vijayakumar, chief investment strategist at Geojit Investments.
“These two strong headwinds have turned the near-term Indian market structure to a strong ‘sell on rally’ structure,” Vijayakumar said.
He added that sustained selling by foreign institutional investors (FIIs) had encouraged bearish positions even in fundamentally strong blue-chip stocks, putting additional pressure on the market.
According to Vijayakumar, high crude prices and elevated US bond yields could prompt FIIs to continue selling Indian equities in the near term, regardless of attractive valuations, particularly among large-cap stocks.
However, he also highlighted the opportunities emerging from the market correction for investors with a longer investment horizon.
“Stock market history tells us that crises are great opportunities to buy. The ongoing corrective phase of the market has opened up opportunities for patient long-term value investors to accumulate high quality stocks from the market. The risk-reward structure of the market now is highly favourable for medium to long-term investment,” he said.
His assessment points to a distinction between the near-term risks facing the market and the opportunities that could emerge for long-term investors. While geopolitical uncertainty, crude prices and foreign fund outflows remain concerns, corrections could create opportunities to accumulate fundamentally strong companies at more attractive valuations.
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.
