Indian stocks have staged their strongest weekly rally since April, but the rebound has yet to broaden beyond the largest companies. A sharp rally in information technology (IT) stocks, and a firmer rupee lifted benchmarks, while foreign investors continued to sell and crude oil above $100 a barrel kept pressure on corporate earnings.
The Sensex gained 3.13% and the Nifty 50 rose 2.79% in the week ended 16 October, their biggest weekly advances since the week ended 10 April. On Friday, the Sensex climbed 0.56% to 74,729.27, while the Nifty advanced 0.65% to 23,146.15.
The gains extended the previous week's rebound, which broke an eight-week losing streak. The challenge now is to turn that recovery into a broader advance backed by earnings rather than sentiment alone.
The Indian rupee strengthened to ₹94.96 against the dollar on Friday from ₹96.74 a week earlier, easing currency pressures.
Sanjit Singh Paul, smallcase manager and managing director at Modulor Capital, attributed the rebound to Reserve Bank of India (RBI) measures supporting the rupee, softer US yields, positive IT results and domestic institutional buying. The RBI opened a special dollar window for oil companies, diverting their demand from the spot market, and tightened currency-hedging rules.