Abstract：Indian benchmarks logged their best session in four months on Thursday, with the Sensex surging 1,533.72 points (2.11%) to close at 74,315.61 and the Nifty 50 gaining 374.65 points (1.66%) to settle at 22,997.35 — even as a global rout in AI and chip stocks hammered markets from Seoul to New York.
The rally was led by IT stocks, with the Nifty IT index climbing 2.60%. Tech Mahindra rose 3.69%, Infosys 3.15%, TCS 2.98% and HCLTech 2.66%, according to India Today. Heavyweights ICICI Bank (up 3.8% per Business Recorder) and Bharti Airtel (up 3.36%) also supported the indices.
ContentsThe day's move was the sharpest for both benchmarks since June 12, per Livemint. The Nifty closed just shy of the 23,000 mark, having reclaimed it intraday for the first time since September 25, CNBC-TV18 reported.
Sectoral action was mixed. Nifty Private Bank advanced 1.89%, Nifty IT rose 1.82% and Nifty Auto gained 1.67%. Laggards included Nifty PSU Bank (down 1.55%) and Nifty Media (down 1.47%), The Hindu BusinessLine reported.
Broader indices lagged. The Nifty 100 rose 0.67%, Nifty 200 gained 0.53% and Nifty 500 advanced 0.38%. But Nifty Smallcap 100 fell 0.87% and Nifty Midcap 100 slipped 0.01% — the rally was not broad-based.
One stock stood out for the wrong reasons. IDBI Bank plunged 8% to ₹83.07 after the Cabinet approved a ₹52,878-crore stake sale to Fairfax at a discount, BusinessLine noted.
The trigger for the global selloff was hotter-than-expected US inflation data on Wednesday, which raised bets of further Fed rate hikes and stoked doubts about the AI investment boom, Business Recorder reported.
The damage overseas was severe. South Korea's KOSPI closed at a six-month low after chipmaker selling triggered a circuit breaker. Japan's Nikkei 225 slumped about 5%. On Thursday, the KOSPI fell 8.18% and the Nikkei 4.18%, per Livemint. The Nasdaq Composite had already dropped 1.88% on Wednesday.
India's relative insulation comes down to composition. The market is less directly exposed to semiconductor manufacturers than South Korea, Taiwan or Japan — its benchmarks are dominated by banks, financials, energy, consumer businesses and IT services, PRESS Insider noted.
There's also a flows angle. Foreign institutional investors have been selling Indian equities while piling into global AI names. If the AI trade unwinds, some of that money could rotate back into India.
“The reversal in AI trade is leading to expectations that foreign investors chasing the theme may look to diversify with non-AI markets like India,” Sunny Agrawal, head of fundamental equity research at SBICAPS Securities, told Business Recorder. “If foreign investors come back, large-cap stocks would be the biggest beneficiaries.”
Thursday's rally wasn't just about fresh buying — a chunk of it was traders scrambling to cover bearish bets.
The put-call ratio of Nifty options expiring October 19 jumped to 1.65 from 1.01 a day earlier, Livemint reported, citing analysts. That implies call sellers were forced to cut short positions as heavyweights like RIL, ICICI Bank, Bharti Airtel and HDFC Bank ripped higher.
“This means that for every 100 calls sold on Thursday, 165 puts were sold, skewing the market in favour of the bulls,” Sudhir Joshi, consultant at Khambatta Securities, told Livemint.
The flows data tells a two-sided story. Domestic institutional investors net bought ₹3,319 crore, while FIIs net sold ₹5,285 crore. But on a gross basis, FIIs still bought ₹12,735 crore — they were both buying and selling, just net sellers.
October has been brutal for foreign flows. FIIs have net sold ₹38,722 crore so far this month, per NSDL data cited by Livemint.
The currency added to the positive tone. The rupee rose 12 paise to close at 95.05 per dollar, its fifth straight session of gains, BusinessLine reported. Livemint put the day's rise at 23 paise to 95.06 — the two outlets differ slightly on the close.
Brent crude fell more than 2% to $103.55 a barrel, easing inflationary worries. Lower oil prices are particularly supportive for India, which imports most of its crude, PRESS Insider noted.
Not all the numbers line up across reports.
CNBC-TV18 said the Nifty reclaimed 23,000 intraday for the first time since September 25, while Livemint said the index closed at 22,997.35 — just below that level. The Hindu BusinessLine's rupee close of 95.05 differs from Livemint's 95.06. These are minor discrepancies, but they exist.
More substantively, market experts are split on whether this rally has legs.
“FIIs who have been selling Indian stocks and buying AI stocks will halt this trend and under favourable conditions might even reverse it,” V K Vijayakumar, chief investment strategist at Geojit Investments, told India Today.
But others caution that one day doesn't make a trend. “We may be seeing the beginnings of that in a few stocks, partly because bond yields have risen,” Christy Mathai, fund manager at Quantum Mutual Fund, told Livemint. “But the earnings outlook for US technology companies remains strong, and we are not yet seeing clear signs of a broader earnings slowdown. So, it is still too early to conclude that global investors are shifting towards India as an anti-AI trade.”
Livemint also noted that market experts do not see the uptrend sustaining as of now, given continued foreign outflows.
Friday brings a busy earnings calendar. Reliance Industries, Wipro, Tech Mahindra and Jio Financial Services are in focus, along with Punjab National Bank, Federal Bank and Crompton Greaves, CNBC-TV18 reported.
Tech Mahindra has already reported an 8.2% quarter-on-quarter rise in consolidated net profit to ₹1,586 crore, beating a CNBC-TV18 poll estimate of ₹1,576 crore. Wipro guided for Q3 revenue growth between -1.5% and 0.5%.
Jio Platforms has filed its Red Herring Prospectus for an IPO that opens October 21 and closes October 23, with a price band of ₹1,065–₹1,119 per share. The issue could raise up to ₹30,213 crore, potentially surpassing Hyundai Motor India's ₹27,870 crore IPO to become India's largest-ever public issue, Livemint reported.
The Nifty's ability to hold above 23,000 will be a key technical signal, per CNBC-TV18. The Hindu BusinessLine pegged near-term support at 22,950–22,900 and resistance at 23,050–23,150.
For traders holding rupee positions, the currency's five-day winning streak is worth monitoring — if it extends, the cost of carrying USD/INR longs changes. The next major trigger is the US inflation data already out, but markets will watch Fed commentary for further direction.
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