On the day, the S&P BSE Sensex surged 862.23 points, or 1.04%, to close at 83,467.66, while the NSE Nifty 50 rose 261.75 points, or 1.03%, to 25,585.30. The Nifty is now 84 points away from its 52-week high of 25,669.35. Over the past two sessions, the Sensex has gained more than 1,500 points, while the Nifty has risen 1.7%.
Here’s what’s behind the rally:
1. Private banks lead the rally
Private lenders were at the forefront of Thursday’s market gains after Axis Bank’s second-quarter results showed an improvement in asset quality and stronger-than-expected net interest margins.
While the bank reported a larger-than-anticipated drop in quarterly profit, analysts highlighted its improved operating performance and healthier balance sheet as encouraging signs.
Heavyweights HDFC Bank and ICICI Bank, together the two highest-weighted stocks on the benchmarks, rose 1.5% and 1.3%, respectively each ahead of their earnings announcements later this week.
2. FII inflows lift mood
After months of persistent selling, foreign institutional investors (FIIs) are turning the tide in October, injecting over Rs 3,000 crore into Indian equities in just seven sessions. The shift from heavy outflows to fresh inflows is lifting benchmarks and hinting at a possible change in sentiment for investors long wary of foreign selling pressure.NSDL data shows that between October 7 and October 14, FIIs were net buyers in five of seven sessions, acquiring more than Rs 3,000 crore in the secondary market. Their participation in the primary market was even stronger, exceeding Rs 7,600 crore. Provisional NSE data indicates another Rs 68 crore flowed in on October 15.
The pace of selling has slowed sharply compared with previous months, when FIIs offloaded Rs 22,761 crore in September, Rs 41,908 crore in August, and Rs 38,214 crore in July 2025.
3. India-US trade talks buoy sentiment
Optimism was further supported by expectations of progress in India–US trade discussions. Recent comments from the US administration suggest easing trade tensions with India and raise the possibility of a trade deal in the coming weeks, said Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Vijayakumar noted that China’s stringent measures on rare earth magnets have affected the US, making it “keen on striking a deal with India, with both countries likely to make some concessions.”
“Even though India’s macro fundamentals remain strong and GDP growth projections for FY26 are being revised upward, exports and employment in labour-intensive sectors such as textiles, gems and jewellery, and leather products have been hit hard. In this context, a US–India trade deal would be a major boost for the markets,” he added.
4. Rupee strength supports stocks
The Indian rupee touched a one-month high on Thursday, supported by firm central bank intervention in the previous session and early optimism over U.S.-India trade talks, helping the currency hold on the stronger side of the 88 mark.
Broader FX markets were muted, with the dollar index steady at 98.6 and most Asian currencies showing little movement.
The Reserve Bank of India’s aggressive intervention in the foreign exchange market on Wednesday has shifted sentiment in the options market, with a key volatility skew moving in favor of the rupee for the first time in over a decade, Reuters reported.
The currency had its best day in four months on Wednesday and extended gains on Thursday, rising more than 1% from a near-record low the previous day.
5. Earnings-related optimism drives gains
HDFC Bank and ICICI Bank, the two heaviest-weighted stocks, rose 1.7% and 1.4%, respectively, while Reliance Industries, the third-largest stock, added 1.7%. All three companies are set to report quarterly results later this week.
Nestle India surged 4.5%, lifting the consumer index by 2%, after stronger urban demand helped drive a rise in its quarterly profit.
Among other gainers, Oberoi Realty surged 5.6% following a 29% rise in its second-quarter profit, while packaging solutions provider Huhtamaki India soared 12% on a three-fold increase in quarterly profit.
The broader small-caps and mid-caps indices gained 0.2% and 0.5%, respectively.
6. Technicals point to potential upside
A close near the 25,330 level, which had been capping gains, negated the prior day’s bearish pattern and suggests the market could push higher toward 25,460, though momentum remains modest, said Anand James, Chief Market Strategist at Geojit Investments, adding that the downside marker is near 25,260.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said 25,150/82,300 remains a key support zone for day traders. As long as the market holds above this level, positive sentiment may continue, with resistance around 25,500-25,550/83,200-83,400. A move below the support would make the uptrend vulnerable and could prompt traders to exit long positions.
