Nifty Snaps 25-Year Losing Streak as TCS Fuels 1.3% Rebound; RBI Rate Hike Whacks Markets Midweek

Mumbai, Oct 10: Indian equities staged a dramatic relief rally on Friday, 9 October 2026, snapping an eight-week losing streak — the longest in 25 years — as a blockbuster quarterly performance from Tata Consultancy Services and easing crude oil prices revived buying sentiment across frontline stocks.

The Nifty 50 surged 288.65 points, or 1.30%, to close at 22,520.45, while the BSE Sensex jumped 879.09 points, or 1.23%, to settle at 72,472.33. Bank Nifty outperformed, rising 1.36% to 55,256.65.

However, the week was far from smooth: the RBI’s surprise rate hike on 7 October sent the Nifty crashing to a fresh 52-week low of 22,179.90 on Thursday before Friday’s rebound rescued the weekly numbers.

Nifty Gains 0.44%, Sensex Adds 0.78% as Volatility Peaks at 15.27

For the full week, the Nifty 50 ended 0.44% higher and the Sensex gained 0.78%, with both indices having declined over the preceding eight weeks — the Nifty falling 8.7% and the Sensex losing 8.4% during that stretch.

The Nifty 50’s weekly range spanned from an intraday low of 22,179.90 on Thursday to a high of approximately 22,776 touched on Tuesday, before Friday’s recovery brought the index back above the crucial 22,500 mark. The Sensex touched an intraday low of 71,406.79 on Thursday, plunging 1,231.91 points at its worst, before recovering sharply on Friday.

TCS shares surged nearly 5% to close at ₹2,153, emerging as the single largest contributor to the Nifty’s Friday rebound after reporting a 14.9% year-on-year rise in net profit to ₹13,884 crore for the July–September quarter, with annualised AI-related revenue reaching $3.1 billion, crossing 10% of total revenue.

ITC led Nifty gainers on Friday, rising 4.33% to ₹266.05, while Eicher Motors gained 3.60% to ₹7,011, Apollo Hospitals climbed 3.52% to ₹7,936, and Adani Ports added 3.14% to ₹1,761.60. On the losing side, BSE Ltd fell 2.00% to ₹3,268, Reliance Industries slipped 0.45% to ₹1,172.70, and JSW Steel edged down 0.15% to ₹1,173.40.

RBI’s 25 bps Rate Hike to 5.50% Crashes Nifty to 18-Month Low; ₹12 Lakh Crore Wiped Out

The week’s most disruptive event unfolded on Wednesday, 7 October 2026, when the Reserve Bank of India’s Monetary Policy Committee unanimously raised the repo rate by 25 basis points to 5.50% and, by a 4:2 majority, changed its policy stance to calibrated tightening — a move that blindsided markets expecting a pause. The Nifty closed at 22,603.05, down 173.05 points or 0.76%, while the Sensex settled at 72,638.70, declining 429.11 points or 0.59%, reversing a two-day gaining streak.

The carnage deepened on Thursday, 8 October 2026, when the Nifty nosedived 371 points or 1.64% to close at 22,231.80 — its lowest closing level since 7 April 2025 — after breaking below the April low of 22,182.55 intraday. The Sensex crashed 1,045.46 points or 1.4% to 71,593.24, with BSE-listed companies’ market capitalisation eroding by over ₹12 lakh crore in two days to stand at ₹460.97 lakh crores.

The RBI’s shift to calibrated tightening raised borrowing costs across the economy, with the most immediate impact on rate-sensitive sectors such as auto, realty, and banking. Vehicle financing costs are expected to rise, potentially dampening demand in an already-weak festive season. The Nifty’s RSI fell to 27.55, firmly in the deeply bearish zone, while the index sustained well below its 10-, 20-, 50-, 100- and 200-day Exponential Moving Averages.

IT Index Jumps 3.02% as TCS Q2 Profit Rises 7.6% to ₹13,884 Crore; FMCG Climbs 2.20%

The Nifty IT index emerged as the week’s best-performing sectoral gauge, surging 3.02% on Friday to close at 28,574.90, buoyed by TCS’s robust September-quarter results and rising confidence in AI-driven revenue opportunities. TCS reported revenue growth of 11.2% year-on-year to ₹73,188 crore (versus ₹65,799 crore in Q2 FY26), while net profit rose 7.6% to ₹13,884 crore compared with ₹12,904 crore in the year-ago period. On a quarter-on-quarter basis, revenue rose 1.2% from ₹72,275 crore in Q1 FY27, while net profit increased 3.3% from ₹13,794 crore, according to Bloomberg estimates cited ahead of the announcement.

The Nifty FMCG index advanced 2.20% to close at 44,864.25, led by ITC’s strong recovery after a massive block deal earlier in the week. The Nifty Auto index gained 1.42% to 24,859.90, while Nifty PSU Bank rose 1.63% to 8,126.35. The Nifty Bank index ended 1.36% higher at 55,256.65, supported by strong quarterly business updates from lenders and the RBI’s decision not to withdraw liquidity despite the rate hike.

At the other end, Nifty Metal was the week’s top laggard, with the index closing at 12,000.75 after Thursday’s broad sell-off saw metal stocks decline over 2%. Nifty Realty also faced selling pressure, with the sector declining over 3.5% during the week amid concerns that higher interest rates would dent property demand. Nifty Oil & Gas was the sole sectoral laggard on Friday, ending marginally lower as crude prices retreated.

India VIX Spikes 10% to 15.27 on Rate Hike; Falls 5.96% to 14.37 by Friday Close

India VIX, the market’s fear gauge, told the week’s story in stark numbers. The volatility index closed at 14.46 on 1 October 2026, before the RBI policy meeting. By Thursday, 8 October, VIX had surged 10.01% to 15.27 — its highest closing level since 11 June 2026 — as the Nifty crashed to an 18-month low and over 300 stocks hit fresh 52-week lows. The spike reflected rising discomfort among bulls, with Brent crude sustaining above $100 per barrel, the rupee weakening to 96.78 against the dollar, and continued FII selling weighing on sentiment.

Friday brought dramatic relief. India VIX opened at 15.27 and crashed to an intraday low of 13.66 before closing at 14.37, down 0.91 points or 5.96%. The decline followed US President Donald Trump’s indication that the US would not attack Iran before the November midterm elections, easing crude oil supply concerns. The VIX’s 52-week range stands between 8.72 and 28.90, with a year-to-date return of 51.58%, indicating that volatility remains structurally elevated compared with the start of 2026.

FIIs Dump ₹12,944 Crore on Rate Hike Day; DIIs Counter with ₹10,703 Crore Purchases

Foreign institutional investors accelerated their selling spree during the week, with the most dramatic outflow occurring on Thursday, 8 October 2026, when FIIs dumped ₹12,944 crore of Indian equities — the second-largest single-day outflow of 2026, exceeded only by the ₹21,106 crore sold on 29 May. FII outflows for October reached ₹37,929 crore after just five trading sessions, with net selling during 2026 crossing ₹4.41 lakh crore. Cumulative FII selling in October — covering only five sessions — has surpassed the ₹35,861 crore in outflows recorded for the entire month of September, according to NSDL data.

Domestic institutional investors provided a critical counterweight. On 8 October, DIIs purchased ₹10,703 crore of equities, taking their total purchases during the first five trading sessions of October to ₹35,613 crore. On Monday, 5 October, FIIs sold ₹4,699.14 crore while DIIs bought ₹5,181.62 crore as the Sensex and Nifty snapped a four-day losing streak. The combined FII-DII flow for October remained marginally positive at approximately ₹3,167 crore as of 6 October.

The week’s largest institutional transaction was a ₹9,395 crore block deal in ITC on Thursday, 8 October 2026, when GQG Partners entities sold 2.91% stake at an average price of ₹257.35 per share to 14 global and domestic institutional investors, including Fidelity International, Citi, and Mirae Asset. The ITC stock, which had tumbled nearly 4% following the block deal, rebounded 4.33% on Friday to close at ₹266.05.

Weekly Gainers and Losers: Trent Surges 13.11% on Q2 Update, DMart Slumps 7.77% on Valuation Concerns

The Nifty 50 index closed the week at 22,520.45, with a mixed bag of winners and losers emerging from stock-specific developments during the 5–9 October 2026 trading period. Among the index constituents, Trent emerged as the standout performer, surging 13.11% during the week, with delivery volumes rising 1.2 times compared with the previous month. The stock’s rally followed the company’s Q2FY27 operational update, which showed healthy growth in sales led by new Westside and Zudio store additions. BSE Ltd gained 7.92%, while Punjab National Bank rose 6.76% and Kotak Mahindra Bank added 5.41%, with the latter recording delivery volumes 1.5 times higher than the previous month. Vedanta rounded out the top five gainers with a 4.74% advance, supported by delivery volumes 1.3 times above the prior month’s average.

On the losing side, Avenue Supermarts (DMart) was the worst-performing Nifty 100 constituent, declining 7.77% as muted store expansion and elevated valuations overshadowed the company’s 18.4% year-on-year Q2FY27 sales growth reported in its quarterly operational update. Vedanta Aluminium Metal fell 7.72%, Jindal Steel dropped 7.61% with delivery volumes surging 2.2 times versus the previous month, Siemens Energy declined 6.99%, and Adani Enterprises lost 6.48%.

On a single-day basis during Friday’s rebound, ITC led Nifty gainers with a 4.33% rise to ₹266.05, followed by TCS at 3.71% to ₹2,153, Eicher Motors at 3.60% to ₹7,011, Apollo Hospitals at 3.52% to ₹7,936, and Adani Ports at 3.14% to ₹1,761.60. On the flip side, BSE Ltd fell 2.00% to ₹3,268, Reliance Industries slipped 0.45% to ₹1,172.70, and JSW Steel edged down 0.15% to ₹1,173.40.

Among Sensex constituents, the weekly performance broadly mirrored the Nifty 50, with ITC, TCS, and Apollo Hospitals emerging as the top gainers during Friday’s session, while BSE, Reliance Industries, and JSW Steel were the leading losers. TCS shares jumped 4.23% on Friday following its Q2 results, while Adani Ports gained 3.36% and Infosys added 3.01%. The Sensex’s weekly gain of 0.78% was largely driven by the Friday surge, which saw the index climb 879.09 points to 72,472.33.

TCS Q2 FY27: Net Profit ₹13,884 Crore, Revenue ₹73,188 Crore; AI Revenue Crosses 10% of Total

TCS, India’s largest IT services exporter headquartered in Mumbai, reported its September-quarter results on 8 October 2026, delivering revenue of ₹73,188 crore (up 11.2% YoY from ₹65,799 crore) and net profit of ₹13,884 crore (up 7.6% YoY from ₹12,904 crore). On a quarter-on-quarter basis, revenue grew 1.2% from ₹72,275 crore, while net profit rose 3.3% from ₹13,794 crore. The company’s EBIT margin stood at approximately 24.33%, with annualised AI-related revenue reaching $3.1 billion — crossing 10% of total revenue for the first time.

The results largely met market expectations. Bloomberg estimates had projected revenue of ₹73,152 crore and net profit of ₹13,794 crore, meaning TCS slightly exceeded both revenue and profit projections. TCS shares surged 4.73% to ₹2,174.10 on the NSE during Friday’s session, eventually closing at ₹2,153, up nearly 5% for the week. The strong numbers triggered a sector-wide rally, with the Nifty IT index surging over 3% and lifting the broader market out of its eight-week rut.

Nifty Midcap 100 Falls 2.14%, Smallcap 100 Drops 1.98% as Broader Market Bleeds

The broader market significantly underperformed the headline indices during the week, with mid and small-cap stocks bearing the brunt of Thursday’s sell-off. On 8 October 2026, Nifty Midcap 50 declined 2.36%, Nifty Midcap 100 fell 2.14%, and Nifty Midcap 150 dropped 2.02%.

Simultaneously, Nifty Smallcap 100 and Nifty Smallcap 50 declined 1.98% and 2.13%, respectively. Market breadth remained deeply negative throughout the week, with total gainers at 3,274 against 2,321 losers, and the Nifty’s advance-decline ratio falling to 46:4 during Friday’s recovery — reflecting that weakness in the broader market persisted even as headline indices rallied.

Among Nifty 100 constituents, Trent shares surged 13.11% during the week after the company’s Q2FY27 operational update showed healthy growth in sales led by new Westside and Zudio store additions, with delivery volumes rising 1.2X versus the previous month. BSE Ltd gained 7.92%, Punjab National Bank rose 6.76%, and Kotak Mahindra Bank added 5.41% as banking stocks benefited from strong quarterly business updates.

On the losing side, Avenue Supermarts (DMart) fell 7.77% as muted store expansion and rich valuations overshadowed its 18.4% YoY Q2FY27 sales growth, while Vedanta Aluminium Metal declined 7.72%, Jindal Steel dropped 7.61%, and Adani Enterprises lost 6.48%.

Auto Sector Slides as RBI Rate Hike Sparks Vehicle Financing Cost Concerns

The RBI’s rate hike on 7 October dealt a direct blow to the auto sector, raising concerns about vehicle financing costs and demand during the crucial festive season.

Mahindra & Mahindra and Ashok Leyland gained early in the week, but selling pressure spread across passenger vehicles, commercial vehicles, two-wheelers, and components as the week progressed. Bajaj Auto, Hero MotoCorp, TVS Motor, and Bharat Forge all came under pressure following the policy announcement.

The Nifty Auto index managed a 1.42% gain on Friday to close at 24,859.90, recovering from Thursday’s sharp declines, but the sector’s underlying sentiment remained cautious amid expectations of higher EMI outflows for consumers. Banking and financial services stocks displayed mixed performance.

Kotak Mahindra Bank, Punjab National Bank, and Union Bank gained during the policy day rebound, while HDFC Bank and Bajaj Finance faced selling pressure by the week’s end as investors weighed the implications of higher borrowing costs on loan growth and asset quality.

World Bank Raises India GDP Forecast to 7.1% for FY27

The World Bank revised India’s economic growth forecast upward to 7.1% for FY27 on 6 October 2026, a 0.5 percentage point increase from its June estimate, citing the economy’s resilience amid global challenges. The upgrade follows official data showing India’s GDP expanded 7.8% in the first quarter of FY27 and is projected to grow 7.3% in the next quarter.

However, macroeconomic tailwinds were offset by mounting external pressures. The rupee continued its declining trend, weakening to 96.78 against the US dollar in late trades on 8 October — its third straight day of decline — as elevated crude oil prices above $100 per barrel and sustained FII outflows exerted pressure on the currency.

The International Monetary Fund suggested that India allow the exchange rate to act as a “shock absorber” as tighter US monetary policy contributes to tighter global financial conditions. Rising US Treasury yields narrowed the India-US yield spread to approximately 200 basis points, limiting the scope for further portfolio inflows into Indian equities.

Jio Platforms’ $3.8 Billion Issue Scheduled for 21 October; Six SME IPOs Listed During the Week

The IPO market witnessed significant activity across mainboard and SME segments during the week, with major upcoming issues and six SME listings drawing investor attention. Jio Platforms, the digital services arm of Reliance Industries, confirmed plans for its much-anticipated IPO, scheduled to open on 21 October 2026 and close on 23 October, with a proposed listing on 28 October.

The issue is expected to raise approximately $3.8 billion, potentially making it India’s largest IPO, surpassing Hyundai Motor India’s $2.9 billion offering in 2024. Banking sources indicated a potential enterprise valuation of $143–146 billion, equivalent to at least ₹12 lakh crore. Following overseas roadshows across the US, UK, Dubai, Hong Kong and Singapore, the company was expected to file its final IPO papers with SEBI during the week beginning 12 October.

Meanwhile, Fusion CX Ltd announced a price band of ₹275–289 per share for its ₹702 crore IPO, opening on 14 October and closing on 16 October. The issue comprises a fresh issue of ₹500 crore and an offer for sale (OFS) of ₹202 crore. With a lot size of 51 shares, the minimum retail investment at the upper price band is ₹14,739. The company reported a 37% rise in total income to ₹1,852 crore in FY26 from ₹1,352 crore in FY25, while profit after tax surged 128% to ₹170 crore.

The SME segment recorded six listings during the week. On 7 October, Vans Electroengineerings raised ₹33.98 crore with subscription of 628.73 times, Papadmalji Agro Foods raised ₹20.18 crore with 2.54 times subscription, and Black Opal Consultants raised ₹55.08 crore with 73.80 times subscription. On 9 October, Acme India Industries raised ₹121.69 crore, attracting 124.23 times subscription; TNA Solutions raised ₹37.86 crore with 55.20 times subscription; and Paramount Syntex raised ₹81.79 crore with 1.88 times subscription. Additionally, EverestIMS Technologies was scheduled to list on 8 October after closing its IPO on 5 October, while HD Fire Protect announced its IPO for 13–15 October.

The week’s data highlights three key variables to monitor: the RBI’s calibrated tightening trajectory and its impact on rate-sensitive sectors; Q2 FY27 earnings delivery versus estimates, particularly for IT and financials; and the trajectory of crude oil prices and FII flows, which remain the primary external risks to market stability. Market participants will watch domestic CPI data and the sustainability of the IT-led rebound in the coming sessions.