Indian shares closed out October on a positive note, with the Nifty recovering to 23,000 and both benchmarks ending a two-month losing streak. IT stocks rose 2.3% even after a heavy US tech selloff. The rally was narrow, though: smaller stocks fell sharply as investors moved into large companies.
Friday began with weak global cues. US tech stocks had fallen sharply overnight, Intel had dropped more than 20% after hours, and markets in Korea and Japan were down heavily. Indian shares rose anyway.
The Sensex gained 308.49 points, or 0.42%, to close at 74,459.53. The Nifty 50 rose 116.35 points, or 0.51%, to 23,053.10, back above 23,000 for the first time in about two weeks. Over the week, the Nifty gained 2%, its best week in more than a month.
IT stocks rose despite the US selloff
The surprise was IT. The Nifty IT index rose 2.3%, led by Infosys, even though US software and chip stocks had just had their worst session in months. Pharma was the other strong sector, up 1.8%.
There are a few reasons IT rebounded. Indian IT had already fallen about 4% on Wednesday ahead of the US results, so much of the bad news was already priced in. The rupee near 95 to the dollar helps exporters’ earnings. And some investors appear to be treating Indian IT services as a way to benefit from AI adoption without the hardware risk now hitting chipmakers.
Trent was the top Nifty gainer after its results. IndiGo, Infosys and Apollo Hospitals followed.
Smaller stocks fell
The broader market weakened. The Nifty Midcap 100 fell 0.93% and the Nifty Smallcap 100 dropped 1.85%, after outperforming earlier in the week. Consumer durables fell 1.78%.
That pattern usually means investors are cautious. Faced with uncertainty, they move money into large, liquid companies that are easier to sell and less volatile. Next week brings the US election on Tuesday and oil prices that rose sharply on Friday.
October ends higher
Despite record foreign selling, a fall in the rupee, oil above $110 and an RBI rate increase, both benchmarks ended October higher, breaking a two-month losing streak. Corporate results were mostly better than feared, especially from banks, autos and consumer companies, and domestic investors kept buying throughout the month.
Market commentators also cited speculation that the government may review long-term capital gains tax as a factor supporting sentiment late in the month. Nothing has been announced, and the speculation should be treated with caution until there is an official statement.
The week ahead
The next few days bring several major events. The US midterm elections are on Tuesday, and President Trump has said military action against Iran could follow. Oil rose more than 2% on Friday after a tanker attack in the Strait of Hormuz. ITC reports on Monday, EAAA India Alternatives lists the same day, and Dhanteras is on Friday, 6 November.
The market showed resilience in October. Whether that continues depends mostly on what happens in the Gulf after Tuesday’s election.
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