The Indian equity market closed 3% higher in the week ended 16 October, extending gains for a second consecutive week. The benchmark indices settled in positive territory, with the NIFTY50 jumping 625.7 points, or 2.8%, and the BSE SENSEX soaring 2,256.94 points, or 3.1%. The rally was led by a strong surge in IT stocks, which were the biggest winners among sectors, posting an 11.7% gain. The IT pack also benefited from momentum after Infosys CEO Salil Parekh disclosed that AI services accounted for over 8% of its revenue in the second quarter and are growing at a double‑digit rate sequentially.

Corporate earnings, the Reserve Bank of India’s (RBI) measures to support the rupee, and the delay in implementing UPI Merchant Discount Rate (MDR) fees were among the key factors that added to the market sentiment for the week. The RBI announced three measures to support the rupee: a dedicated window for public sector oil marketing companies (OMCs) to buy US dollars directly from the central bank, an open‑market sale of ₹25,000 crore in government securities, and a requirement for banks to maintain 99% of the prescribed cash reserve ratio (CRR) daily from 16 October 2026. These actions eased pressure on the spot market and added further support to the domestic currency.

The Indian rupee appreciated against the benchmark US dollar as investors focused on the latest forex move from the RBI. The central bank’s measures, coupled with updates on tightening liquidity amid inflation concerns, bolstered investor confidence. Additionally, the International Monetary Fund (IMF) on 13 October raised its growth forecast for India to 7% for 2026, citing stronger‑than‑expected economic momentum, resilient domestic demand and robust services activity. This positive outlook further lifted market sentiment during the week.

Elevated crude oil prices remained a concern but did not prevent the market from closing higher. Over the week, Brent crude touched a high of $110 per barrel on Friday after beginning at $104.95 per barrel on Monday. Despite this, the broader market ended mixed and underperformed the main indices as well, with the NIFTY Midcap 100 closing 0.6% higher and the NIFTY Smallcap 100 slipping marginally by 0.1%. The NIFTY Pharma, NIFTY FMCG and NIFTY PSU Bank sectors were the only sectoral losers, falling 0.7%, 0.6% and 0.4% respectively, while the India VIX index slipped 2.2% this week.

Shares of Waaree Energies posted sharp gains for the week after its wholly owned subsidiary, Waaree Power Private Limited, commenced commercial production on a new solar inverter manufacturing line with an annual capacity of 1.10 GW in Valsad, Gujarat, on 30 September. On the small‑cap index, Tata Elxsi contributed the most after the IT firm reported a broad‑based growth across all three key verticals for the quarter ended 30 September (Q2 FY27). Private sector lender YES Bank shares declined as investors focused on a 250‑basis‑point impact on the CET1 ratio due to the Supreme Court’s latest order, while RBL Bank shares also tumbled after the company’s July to September quarter earnings performance trailed expectations amid elevated credit costs, equity fundraising impact and muted EPS growth.

Despite the healthy overall Q2 growth, a deeper dive into the financials showed RBL Bank’s credit cost increased 53% on a year‑on‑year basis to ₹771 crore, from earlier ₹503 crore levels. The sectoral watch this week highlighted that NIFTY Media and NIFTY Auto jumped 61% and 3.7% respectively, while NIFTY Realty and NIFTY India Defence rose 2.7% and 2.3% respectively. The article notes that TCS, Tech Mahindra, Bajaj Auto, Bharti Airtel, among the top 10 stocks that outperformed NIFTY50 this week, and encourages readers to check the full list for further details.