Festive cheer ahead of Diwali lifted Dalal Street on Thursday as strong Q2 earnings by heavyweights and supportive global cues propelled benchmarks to multi‑month highs.
The Nifty 50 briefly crossed the 25,600 mark for the first time since June 27 amid broad‑based buying before mild profit‑taking trimmed gains. The Sensex jumped 862.23 points, or 1.04%, to 83,467.66, while the Nifty 50 climbed 261.75 points, or 1.03%, to 25,585.30. Broader indices too ended firm, with the Nifty Midcap and Smallcap indices up 0.46% and 0.24%, respectively.
Analysts said the rally was fueled by optimism over an earnings recovery and firm global cues. Solid performance by private banks and upbeat expectations from HDFC Bank and ICICI Bank boosted sentiment. Hopes of progress in US–India trade talks and possible Fed rate cuts also pushed benchmarks near recent highs.
According to Bajaj Broking, the rally is supported by both domestic and global cues, with declining crude oil prices and stable US yields providing a favourable macro backdrop. Vishnu Kant Upadhyay, AVP -Research & Advisory, Master Capital Services, said that on the global front, remarks by US Federal Reserve Chair Jerome Powell indicating labour market softness boosted expectations of a potential rate cut, improving risk appetite. Additionally, the Indian rupee appreciated to a seven-week high against the US dollar, while a decline in crude oil prices further enhanced market sentiment, he added.
Sectorally, the market breadth remained positive. Barring the Nifty PSU Bank index, which slipped 0.4% on selective profit-booking, all other sectoral indices on the NSE closed in the green. Nifty Auto, Bank, Consumer Durables, Realty, FMCG, and Oil & Gas indices posted gains in the range of 0.5% to 1.7%.
Among Nifty50 stocks, Nestle India shares climbed over 4% after the FMCG major’s July-September quarter earnings beat Street estimates. Nestle India’s standalone net profit fell 23.6% year-on-year to Rs 753.2 crore in the July-September quarter, but still exceeded Street expectations.
Foreign institutional buyers turning net buyers of Indian stocks also supported the rally. FIIs bought Rs 68.6 crore, while DIIs added Rs 4,650 crore on Wednesday, reflecting robust institutional participation and improved liquidity.
“Macro sentiment remained positive, aided by falling crude oil prices, favorable Asian cues, and hopes of a US Fed rate cut. Additionally, the government’s expected Rs 40,000–45,000 crore defence capex boost and a potential PSU bank merger supported market optimism. Investor confidence was further lifted by progress on India–US trade talks, with discussions in Washington expected to focus on energy cooperation. We expect markets to edge upwards as the earnings season progresses and any positive developments emerge on the trade deal front,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Ajit Mishra – SVP, Research, Religare Broking, said that on Friday, participants will first react to Infosys’s Q2 results, and its performance—along with that of other IT majors—will play a key role in sustaining momentum.
“Meanwhile, the banking index appears poised for a new record high ahead of key earnings. With Nifty having decisively crossed the 25,450 trendline hurdle, we now expect a move toward 25,670 (June 2025 high), followed by 25,800 next. Traders should maintain a “buy on dips” approach, focusing on sectoral rotation and strong stock-specific setups,” he added.
