Indian equity markets extended their rally for a second straight week, posting their best weekly gains since April. The Nifty 50 rose 2.77 percent, or 625.7 points, to close at 23,146.15, while the BSE Sensex gained 2,256.94 points, or 3.11 percent, to end at 74,729.27. The rally was important, as it came despite crude oil remaining elevated, foreign investors continuing to sell and a weak global market. Strong buying in IT stocks, upbeat second-quarter earnings, a firmer rupee, and steady support from domestic institutional investors were the main reasons for the strong performance of frontline stocks.
The Nifty Midcap 100 index added 0.6 percent, while the Nifty Smallcap 100 index ended the week largely flat. Market capitalisation of BSE-listed companies swelled by more than Rs 7 lakh crore.
Information technology stocks led the rally, with a 11.7 percent gain, the biggest weekly gain in 18 years. Sentiment got a further push when Infosys CEO Salil Parekh said AI services accounted for over 8 per cent of the company's second-quarter revenue and were growing at a double-digit rate sequentially. The contrasting strength of Indian IT stocks versus global peers is sparking debate about whether Indian companies could serve as a hedge against global AI-driven sell-offs.
Besides IT, the Nifty Media index jumped more than 6 percent, and the Nifty Auto index gained 3 percent. The Nifty Realty and Nifty Defence indices advanced 2.7 percent and 2.2 percent, respectively. Defensive sectors lagged as money rotated toward growth and cyclicals. The Nifty Healthcare index slipped 1 percent, while the Nifty Pharma and Nifty FMCG indices fell 0.7 percent and 0.55 percent, respectively.
The rupee snapped a two-week losing streak and recovered 178 paise to close at 94.95 per dollar on October 16, compared with 96.73 on October 9. Measures from the Reserve Bank of India to support the currency helped, and the delay in implementing UPI MDR fees added to the positive mood.