Indian Market Weekly Wrap: Nifty Ends Eight-Week Losing Streak As TCS, RBI And Oil Drive Volatility

Indian equities finally broke their eight-week losing streak during the week ended October 9, but the recovery came with plenty of swings as crude oil, the RBI's rate decision, foreign selling and the start of the Q2 earnings season kept investors on edge.

The Nifty 50 gained 98.50 points, or 0.44 per cent, during the week to close at 22,520.45, while the Sensex rose 562.63 points, or 0.78 per cent, to 72,472.33. The rebound came almost entirely from Friday's sharp recovery, which helped the benchmarks avoid a ninth consecutive weekly decline. 

A Week Of Sharp Swings

The week began on a positive note. On Monday, October 5, the Nifty gained 0.60 per cent to 22,555.75 and the Sensex rose 0.66 per cent to 72,382.47. Easing crude prices and softer expectations of further US monetary tightening provided some relief after eight consecutive weeks of losses. Financial stocks also gained following quarterly business updates from several lenders and NBFCs. 

The recovery gathered pace on Tuesday. The Nifty climbed another 0.98 per cent to 22,776.10, while the Sensex jumped 685.34 points to 73,067.81. Brent crude slipped below USD 100 a barrel, helping ease some of the immediate pressure on emerging-market assets. Trent was a major stock-specific mover after a strong quarterly business update, while Banking stocks also attracted buying. 

The mood changed on Wednesday after the Reserve Bank of India delivered a rate hike. The Nifty fell 0.76 per cent to 22,603.05 and the Sensex declined 429.11 points to 72,638.70. The sell-off reflected concerns that higher interest rates could add pressure to borrowing costs and economic activity, particularly after the RBI shifted its stance towards calibrated tightening. 

Thursday was the week's most difficult session. The Nifty plunged 1.64 per cent to 22,231.80, its lowest close in 18 months, while the Sensex dropped 1,045.46 points to 71,593.24, its lowest level in around 32 months. All 16 major sectoral indices ended lower. 

Crude Oil Becomes The Biggest Macro Risk

Oil remained at the centre of the week's market moves. Brent crude moved sharply higher as attacks on shipping in the Gulf raised concerns about supply disruptions. On Thursday, Brent surged above USD 104 a barrel, adding to worries about imported inflation in India.

The impact was felt beyond the oil sector. Higher crude prices raise India's import bill, put pressure on the rupee and can complicate the inflation outlook. That combination became particularly uncomfortable for equities after the RBI had already adopted a more hawkish policy stance. 

Friday brought some relief as Brent prices eased after US President Donald Trump said the United States would not attack Iran before the November midterm elections. The improvement in geopolitical sentiment, combined with softer oil prices, helped investors return to risk assets. Brent was still around USD 103 a barrel, however, meaning the underlying risk had not disappeared. 

RBI Raises Repo Rate To 5.50 Per Cent

The RBI's October 7 decision was one of the week's biggest economic developments. The Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.50 per cent, marking the first increase since February 2023.

More importantly, the policy stance was changed from neutral to calibrated tightening. The central bank also raised its FY27 GDP growth forecast to 7.1 per cent while increasing its inflation projection to 5.2 per cent. The decision reflected growing concerns around oil prices, food inflation and weather-related risks even as domestic economic activity remained resilient. 

The rate hike added pressure to interest-rate-sensitive pockets of the market, particularly Real Estate, automobiles and consumer-facing sectors. At the same time, the RBI's decision not to use additional liquidity-tightening measures provided some support to financial stocks. 

Foreign Investors Keep Selling

Foreign selling remained one of the biggest problems for Indian equities. FIIs were net sellers in the cash market on every trading day from October 5 to October 9.

Their total selling during the five sessions amounted to around Rs 30,294 crore, according to provisional exchange data. Domestic institutional investors, meanwhile, bought around Rs 30,313 crore, almost completely absorbing the foreign outflows.DII-month/cash/30-oct-2026/?utm_source=chatgpt.com"> 

The divergence between foreign and domestic investors continues to be important. Domestic institutions have provided a cushion during the prolonged correction, but the market will need foreign flows to stabilise if the recent rebound is to develop into something more durable.

IT Stocks Make A Strong Comeback

The biggest positive development for the market came from the IT sector. TCS kicked off the Q2 earnings season on Thursday with results that were better received than the market had feared.

TCS reported Q2 revenue of USD 7.642 billion, up 0.2 per cent sequentially and 2.4 per cent year-on-year in dollar terms. Net profit stood at USD 1.45 billion, while annualised AI revenue reached USD 3.1 billion. The company also reported total contract value of USD 9.6 billion and maintained an operating margin of 24 per cent. 

The results triggered broad buying in IT stocks on Friday. The Nifty IT index gained 3.02 per cent during the session and finished around 1 per cent higher for the week. Investors also looked past concerns surrounding the US suspension of some technology companies from the PERM programme, focusing instead on actual earnings performance and the growing contribution from AI-related services. 

FMCG And PSU Banks Outperform

The weekly sector picture was mixed. Nifty FMCG gained around 2.5 per cent, while Nifty PSU Bank rose about 2.4 per cent. Nifty Bank gained roughly 1.5 per cent and Nifty IT advanced around 1 per cent.

On the other side, Nifty Realty and Nifty Metal were the biggest losers, both falling around 3.7 per cent. Nifty Auto declined 2.1 per cent, while Nifty Pharma and Nifty India Defence also ended lower. The broader market was comparatively stable, with the Nifty Midcap 100 gaining 0.1 per cent and the Nifty Smallcap 100 rising 0.5 per cent.

Among individual stocks, Trent stood out with a weekly gain of 13.1 per cent following strong quarterly sales commentary. At the other end, Adani Enterprises fell 6.5 per cent and emerged as the biggest Nifty loser amid concerns around a possible reduction in GQG Partners' exposure. 

Jio IPO Adds To Primary Market Buzz

The week also ended with fresh excitement around India's primary market. Reuters reported that Jio Platforms is targeting a valuation of around USD 106 billion for its proposed IPO, with a reported price band of Rs 1,065 to Rs 1,119 per share and potential fundraising of up to around Rs 30,200 crore.

If completed at that scale, the issue would become India's largest IPO, surpassing Hyundai Motor India's 2024 offering. The proposed issue adds another major event to an already active Indian primary market. 

What Lies Ahead

The market has ended a painful eight-week losing streak, but Friday's rally alone does not confirm a trend reversal. The Nifty is still dealing with elevated crude prices, a weak rupee, persistent FII selling and a tighter RBI stance.

The next phase of the market's recovery will therefore depend heavily on Q2 earnings, foreign flows, the direction of crude oil and global bond yields. For now, the biggest positive is that buyers finally stepped in after Thursday's sharp sell-off. Whether they can maintain that conviction will be the key question for Dalal Street in the coming week. 

Disclaimer: The article is for informational purposes only and not investment advice