Nifty IT’s Record 11.5% Weekly Surge Lifts Sensex 3.11% as Rupee Rebounds; Jio IPO and RBI Tightening Loom Over Markets

Mumbai, 17 Oct: Indian equity markets closed the week ended 16 October 2026 with their strongest gains since early April 2026, as a historic rally in information technology stocks powered the benchmark indices to a second consecutive weekly advance. The S&P BSE Sensex surged 2,256.94 points or 3.11% to settle at 74,729.27, while the Nifty 50 added 625.7 points or 2.78% to close at 23,146.15.

The rally was led by the Nifty IT index, which skyrocketed 11.5% during the week, its biggest weekly gain in nearly 18 years, as quarterly earnings from major technology companies reinforced confidence in the sector. Foreign institutional investors returned as net buyers on Friday, purchasing equities worth ₹1,165.92 crore, while domestic institutional investors turned net sellers to the tune of ₹3,661.28 crore.

The week’s trading pattern was marked by significant volatility across sessions. The Sensex declined 547.65 points on Monday to 71,924.68, then surged 1,109.10 points on Tuesday to 73,033.78, before slipping 251.89 points on Wednesday to 72,781.99. Thursday witnessed a massive 1,533.72-point rally to 74,315.61, and Friday added another 413.66 points to close at 74,729.27.

The Nifty 50 followed a similar trajectory, opening the week at 22,520.45, touching a weekly high of 23,195.60 on Friday and a weekly low of 22,380.75 on Monday, before closing at 23,146.15. The trading range for the Nifty 50 during the week was 814.85 points, reflecting the sharp swings in sentiment.

IT Index’s Record 11.72% Weekly Gain Powers Nifty Above 23,100 on Q2 Earnings

The Nifty IT index emerged as the principal driver of the week’s rally, surging 11.72% — its strongest weekly performance since April 2008. The index opened the week at 38,245.30, touched a weekly high of 42,890.55 on Friday and a weekly low of 38,120.40 on Monday, before closing at 42,730.85.

Tech Mahindra led the sector with an 18.7% weekly gain after reporting quarterly revenue of ₹16,180 crore and securing new deals worth $1.02 billion, representing a 25.4% year-on-year increase in deal wins. The company’s Q2FY27 net profit rose 32.74% year-on-year to ₹1,585.6 crore, accompanied by a 1:1 bonus issue and an interim dividend of ₹15 per share.

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Wipro advanced 5.95% on positive quarterly revenue performance, while TCS rose 3.26% and Infosys gained nearly 4%. HCL Technologies’ improved growth guidance added further momentum to the sector. A global sell-off in artificial intelligence-linked stocks pushed investors toward traditional software companies, benefiting Indian IT firms.

Rupee Strengthens 2% to ₹94.96 per Dollar; Brent Crude Moderates to $105

The Indian rupee recovered sharply against the US dollar during Friday’s trading session, strengthening to approximately ₹94.96 per dollar from levels close to ₹97 earlier in the week. The rupee appreciated around 2% for the week, recording its strongest weekly performance since March 2026.

International crude oil prices moderated from recent highs, with Brent crude trading near $105 per barrel compared with approximately $106 earlier in the week. The decline offered some relief to domestic equities, though crude oil prices remain a concern given India’s heavy dependence on imports, which can increase import expenses, pressure the rupee and contribute to inflation.

Gold prices remained elevated during the week, with the precious metal continuing to attract safe-haven demand amid global uncertainty over US monetary policy and geopolitical tensions.

IMF Raises India GDP Forecast to 7%; WPI Inflation Accelerates to 11.39%

The International Monetary Fund raised India’s GDP growth forecast to 7% for both FY27 and FY28, citing resilient domestic demand and robust services activity, providing a supportive backdrop for equities. However, wholesale price index inflation accelerated to 11.39% in September 2026 from 9.92% in August, marking its highest level in the new series.

The increase was driven by rising prices across major categories, with fuel and power inflation climbing to 25.9% from 22.9% in August. Inflation in food articles rose to 8.66% from 7.05%, while manufactured products inflation accelerated to 9.76% from 8.37%. The RBI introduced measures to meet dollar requirements of state-owned oil marketing companies, tightened foreign exchange derivative rules, and raised the minimum daily cash reserve ratio maintenance requirement for banks to 99% from 90%.

Bond yields remained range-bound during the week, with the 10-year benchmark government securities yield hovering around 6.85%, as the market weighed the inflationary pressures against the RBI’s liquidity management measures.

Nifty Next 50 Outperforms with 3.36% Gain; Midcaps and Smallcaps Underperform

The Nifty Next 50 index delivered a weekly return of 3.36%, marginally outperforming the Nifty 50’s 2.78% gain, with the index closing at 73,061.45 and reaching a weekly high of 71,778.60. The index opened the week at 70,685.25 and touched a weekly low of 70,420.15 on Monday.

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However, broader markets substantially underperformed the benchmarks. The Nifty Midcap 100 and Nifty Smallcap 100 indices ended lower by 0.11% and 0.01% respectively on Friday, recovering from intraday lows but remaining subdued relative to frontline indices. For the full week, the BSE 150 Mid-Cap index gained just 0.56% to close at 16,009.02, while the BSE 250 Small-Cap rose 0.47% to end at 6,915.82. The Nifty Midcap 150 and Nifty Smallcap 250 ended the week with minor gains of 0.62% and 0.36% respectively. The Nifty 100 closed at 23,845.60, up 2.65%, while the Nifty 200 ended at 12,980.45, gaining 2.48%.

The Nifty 500 closed at 21,450.30, up 2.32%. The BSE 100 gained 2.58% to close at 24,120.85, while the BSE 500 rose 2.35% to end at 33,680.40. The advance was not broad-based, with buying concentrated in large-cap stocks supported by strong quarterly results from TCS and HCL Technologies.

India VIX Slides 4.54% to 14.02 as Volatility Cools Amid Market Rally

India VIX, the market’s fear gauge, slid 4.54% over the week to settle at 14.02, providing significant relief to market participants. On Thursday, 15 October, the volatility index fell 0.61 points or 4.17% to close at 14.02 compared with the previous close of 14.63, after opening at 14.62 and touching an intraday high of 14.94 and a low of 13.90.

The decline in volatility coincided with Indian equities making gains led by IT and other major sectors, while international markets remained under pressure from US inflation concerns and a sharp sell-off in Asian technology shares. On Wednesday, 14 October, India VIX had risen 4% as benchmark indices declined amid rising crude oil prices and persistent foreign investor outflows.

The year-to-date return for India VIX stood at 47.89%, with the 52-week range between 8.72 and 28.90. The inverse relationship between India VIX and the Nifty 50 was evident throughout the week, as the volatility index declined on days when the benchmark index rallied and rose on days when it fell.

Bank Nifty Flat at 55,844; FMCG, Pharma and Realty End Lower

The banking sector delivered a subdued performance during the week, with Bank Nifty finishing nearly flat at 55,844. The index opened the week at 55,920.50, touched a weekly high of 56,180.75 on Tuesday and a weekly low of 55,210.30 on Wednesday. On Wednesday, Nifty Bank declined 0.30% to 55,316.00 amid weakness in private bank stocks.

Federal Bank gained 2.9% after its Q2 net profit rose 45.1% year-on-year to a record ₹1,386 crore. FMCG fell 0.4% for the week, weighed down by input cost pressures and soft consumption demand, while real estate and pharma also ended lower. On Wednesday, Nifty Pharma declined 1.30%, followed by Nifty Auto which fell 0.94%, while Nifty Realty lost 0.87% and Nifty Metal declined 0.67%.

Information Technology, Energy, Oil & Gas, Media and FMCG gained 0.5-1% on that day, while Auto, Metal, Pharma, Realty, and Private Bank declined 0.5-1.7%. The Nifty Healthcare index ended the week down 0.85%, while Nifty Media gained 1.20% during the week. Nifty Metal closed 0.45% lower for the week.

FII Selling Nears ₹50,000 Crore in October; DII Buying Matches 104% of Outflows

Foreign institutional investors continued their selling spree through most of the week, with net selling of ₹5,285.37 crore on Thursday, 15 October — their 15th straight session of net selling.

Domestic institutional investors bought ₹3,319.39 crore on the same day. The latest outflow took October’s cumulative FII selling to ₹49,934.93 crore, with FIIs having been net sellers in all 10 sessions of the month. DIIs have been net buyers in all 10 sessions, with cumulative buying of ₹51,829.41 crore — approximately 104% of FII selling for the month. The combined FII-DII flow for October stands at a positive ₹1,894.48 crore.

On a year-to-date basis, FIIs have sold a net ₹4.50 lakh crore, while DIIs have bought ₹6.90 lakh crore. Foreign investors returned to buying on Friday, purchasing equities worth ₹1,165.92 crore, snapping a day of heavy selling, while domestic institutional investors turned net sellers to the tune of ₹3,661.28 crore.

Transformers and Rectifiers Surges 17% on 135% Q2 Profit Jump; Tata Elxsi Gains 22.8%

Transformers and Rectifiers (India) shares soared 17% on 14 October after reporting a 135% year-on-year jump in consolidated net profit to ₹80 crore for the September quarter of FY27, supported by strong operational performance and an exceptional gain of ₹131.5 crore. Revenue from operations rose 60% year-on-year to ₹739.4 crore, compared with ₹460 crore a year earlier, while EBITDA margin expanded to 17.4% from 12.8%.

Managing Director and CEO Satyen Mamtora attributed the revenue growth to improved utilisation levels at the company’s Changodar and Moraiya plants and said expansion of transformer manufacturing facilities was nearing completion, with commercial production expected to begin around Diwali. The company recorded order inflows of ₹3,283 crore in the first half of FY27, marking a 161% year-on-year increase, with an unexecuted order book of ₹7,237 crore as of 30 September 2026.

Tata Elxsi shares rallied 7.46% to ₹3,682.50 on 14 October after reporting a 15% year-on-year increase in revenue to ₹1,055.7 crore, with EBITDA margin rising to 21.9%. Net profit increased 10% annually to ₹170.30 crore in Q2FY27. The company delivered revenue growth of 2.3% quarter-on-quarter in constant currency terms, ahead of estimates, while EBIT margin expanded 70 basis points quarter-on-quarter to 19.7%.

Nestle India Jumps 36% in Q2 Profit but Stock Falls 4% on Growth Concerns

Nestle India reported a 35.9% year-on-year jump in consolidated net profit to ₹1,009.6 crore for the quarter ended September 2026, against ₹743.2 crore a year earlier. Total sales grew 20.5% to ₹6,782.2 crore, driven by robust double-digit volume growth across product categories and higher brand investments.

However, the stock fell nearly 4% following the results, with analysts flagging concerns over growth slowdown and a potential Super El Nino risk. EBITDA margins expanded 187 basis points, while revenue and EBITDA grew 20.3% and 30.5% year-on-year respectively.

Bank of Baroda Falls 3.5% as BR Shetty Files $15 Billion Lawsuit

Bank of Baroda shares shed 3.5% on 14 October after Bavaguthu Raghuram Shetty, founder of NMC Healthcare and UAE Exchange, filed a lawsuit in the Bombay High Court seeking $15 billion in damages against the lender and 25 other defendants, alleging banking irregularities linked to the collapse of NMC Healthcare. Shetty is seeking $5 billion each in direct and consequential damages, with interest at 18% per annum. Bank of Baroda said it had not been served with court papers and vowed to defend the case.

Zetwerk ₹5,012 Crore IPO Opens; Jio Platforms’ ₹30,213 Crore Issue to Follow

Zetwerk Manufacturing Businesses Ltd opened its ₹5,012.33 crore initial public offering for subscription on 15 October 2026, with the issue closing on 19 October. The company aims to raise fresh capital of ₹2,830 crore, with the remaining amount through an offer for sale. By Day 2, the issue was subscribed 0.31 times, with retail and QIB categories at 0.37 times each and NII at 0.17 times. The allotment is expected to be finalised on 21 October, with listing tentatively scheduled for 23 October.

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Reliance Industries-backed Jio Platforms is set to launch its ₹30,213 crore initial public offering on 21 October 2026, which could become India’s largest-ever IPO. The issue comprises a fresh issue of up to 27.00 crore equity shares, with no offer for sale by existing shareholders.

The price band for Jio Platforms IPO has been set at ₹1,065 to ₹1,119 per share, with the issue remaining open for subscription until 23 October. The minimum investment amount for retail investors is ₹13,428 for 12 shares at the upper price band. The basis of allotment is expected to be finalised on 26 October, with listing tentatively scheduled for 28 October.

US CPI Accelerates to 3.7%, Raising Fed Rate Hike Probability to 44%

US headline inflation accelerated to 3.7% year-on-year in September, up from 3.4% in August and surpassing expectations of 3.6%. Core inflation excluding food and energy rose to 2.6% year-on-year against forecasts of 2.5%. Following the data release, the probability of the Federal Reserve raising interest rates at its 27-28 October meeting increased from 22% to 44%, according to the CME FedWatch Tool.

The hotter-than-expected inflation reading triggered a sharp sell-off in Asian technology stocks amid unwinding of crowded AI positions and higher funding-cost concerns, keeping global risk appetite under pressure. Buying in Indian equities was concentrated in large-cap stocks, supported by strong quarterly results from TCS and HCL Technologies and interest in attractively valued mega-cap stocks following recent corrections. European markets ended the week mixed, with the FTSE 100 down 0.45% and the DAX up 0.32%, while Asian markets were largely negative, with Japan’s Nikkei 225 falling 1.20% and Hong Kong’s Hang Seng declining 1.85% during the week.

The week demonstrated a clear divergence between large-cap IT-led momentum and subdued broader market participation, with FII selling continuing even as DII buying provided a counterbalance. The upcoming Jio Platforms IPO and Zetwerk issue will test market liquidity, while the RBI’s calibrated tightening stance and elevated WPI inflation warrant monitoring. Investors should track US inflation data and Fed policy signals, as these remain key determinants of foreign fund flows into Indian equities.